You may have heard that the Securities and Exchange Commission (SEC) approved a new rule back in 2019 called Regulation Best Interest (REG BI). As of July 1st, 2020 – Reg BI has officially gone into effect and with it a new requirement for broker-dealers and registered investment advisors to act in the best interest of their customers – assuring that customer’s financial and other interests are placed before their own.
So, how does this affect you as a client of Sterling Retirement Resources? In short, it doesn’t change the way we’re working with you and giving advice. As Investment Advisor Representatives and Certified Financial Planning (CFP®) professionals, Steve, Megan, and Luke already have an obligation to act as a fiduciary; or the duty of one party to another with a requirement to always act in the client’s best interest.
We don’t take our duties as fiduciaries lightly, and we fully support the implementation of the new RegBI rule with a goal of raising the bar for standards of conduct between our industry and the mainstream public as a whole.
With new laws and regulations often comes new forms and paperwork and this time around is no different. You will be receiving a copy of a document entitled “Form CRS” from our Broker/Dealer, Cetera Advisor Networks – as well as some supplemental disclosures. The “Form CRS” describes the services that we provide, how we are compensated, and other important information about Cetera Advisor Networks.
We are required to provide these forms to you as part of the new RegBI rule, however, to be clear – no action is required on your part at this time.
Additionally, there are some other changes that have taken place industry wide due to the passing of the new RegBI. One of the major changes states that in order to use the title “advisor” or “adviser” – a financial professional must be properly registered and contracted as an Investment Advisor Representative. The brokers and/or insurance professionals that solely work on a commission/transactional business model are no longer allowed to market themselves as “Financial Advisors”.
If you would like more information (and details on the nitty-gritty of the new rule) – the Chairman of the SEC, Jay Clayton, has an article published to the SEC.gov website that goes into more detail.
As always, we are certainly here to answer any questions or comments you have. We greatly appreciate your continued trust and confidence and look forward to continuing to help you manage the many moving parts of your financial lives.
Steve, Meg, Luke, and the Sterling Team