The U.S. Securities and Exchange Commission took a preliminary step toward setting a new standard for brokers’ conduct with customers, asking the industry for input on a potential rule.
Authorized by the 2010 Dodd-Frank Act and advocated by a 2011 staff study, the SEC requested information today from the industry and public on costs and benefits of requiring brokers to give personalized investment advice that’s in the best interest of clients. The current standard for brokers is lower, requiring that they sell products to clients that are suitable for them at the time of sale.
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