The Vagueness of the Best Interest Exemption

One of the interesting points of the new fiduciary rule is the best interest exemption that is intended to stop conflicts of interests especially for brokers who need to meet a new fiduciary standard.

As long as a broker can show that investment guidance was in the best interest for their clients, they should avoid being tagged as having a conflict of interest especially if they are selling their own proprietary product or getting a better trail of fees.

What is the best interest exemption? It seems like a low burden for a broker to meet, nut I think it’s so vague that only litigation will end up defining what is actually in the best interest for clients.

Just my two cents.

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