As broker-dealers prepare to implement policies to comply with the SEC’s Regulation Best Interest (Reg BI), one requirement they should be cognizant of is the requirement under the Care Obligation to consider reasonably available alternatives prior to making a recommendation, said WealthForge.
The Care Obligation requires brokers to “exercise reasonable diligence, care, and skill when making a recommendation to a retail customer.” This new requirement brings registered representatives at broker-dealers closer to the standard that RAIs are held to under the fiduciary rule.
To read more on how to exercise reasonable diligence, care, and skill as a broker,