TD Ameritrade Seeks to Clarify the SEC’s Best Interest Rule for its 6,000 RIAs
From the Desk of Jim Eccleston at Eccleston Law LLC:
As a result of the SEC’s proposed “best interest” rule, TD Ameritrade has offered its 6,000 RIAs insight into how it interprets the language in the proposal.
In its analysis TD Ameritrade asserts that although the SEC uses the same term “best interest” in its proposal to describe the duties that investment advisers and broker-dealers owe their clients, there are critically different standards of care for both.
For example, the best-interest rule applies only to broker-dealers when they recommend securities transactions or investment strategies. However, the best-interest rule applies to investment advisers not only for securities transactions or investment strategies but also for recommendations of account types such as an IRA rollover, which are not necessarily accompanied by a securities transaction.
Furthermore, another critical difference is that for broker-dealers, the best interest proposal applies only for recommendations to retail customers, as opposed to the investment adviser standard, which applies to all of the adviser’s clients.
Lastly, in contrast to investment advisers which have a continuing duty, for broker-dealers, the best interest standard applies only at the time a recommendation is made, meaning that there would be no legal duty for broker-dealers to monitor investment recommendations and the accounts of their customers.
The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities Fraud, Compliance Protection, Breach of Fiduciary Duty, FINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.
Related Attorneys: James J. Eccleston
Tags: james eccleston, eccleston law, eccleston law llc, eccleston, SEC, td ameritrade