Jessica Reece Discusses Reg BI and Mutual Funds with ETF Clones in Ignites

In The News
November 8, 2024

In an Ignites article, asset management partner Jessica Reece discussed Reg BI considerations when offering mutual funds and their ETF clones, noting that "Reg BI requires brokers who choose more expensive products to have a rationale for doing so."

Regulation Best Interest (Reg BI), or the 2019 broker-dealer standard of conduct rule, serves as a layer of investor protection that makes a broker's standard of conduct much more comparable to an advisor's fiduciary duty. This means brokers may need to carefully consider and document the reasons for their recommendations, especially in situations where they recommend a higher-cost mutual fund over a lower cost, identical ETF.