The Securities and Exchange Commission instituted Reg BI in June 2020. It requires stockbrokers and FINRA licensed financial advisors to act in a customer’s “best interest” when recommending any securities transactions or investment strategy involving securities. Reg BI also extends to recommendations of account types (e.g. fee based versus commission based accounts) and recommendations to hold a security or promises to monitor a position in a customer’s account. This standard means that a financial advisor must place his/her interest behind that of the customer’s. Violations of Reg BI may include:
The Prosser Law Firm can handle an array of issues surrounding contract, corporate and business disputes:
- Recommendation of a higher commission security despite the existence of a lower cost alternative;
- Recommendation of a trading strategy that presents minimal benefits to the investor, while generating substantial revenues for the financial advisor/firm;
- Selling a long-term investment such as A-Share mutual funds or municipal bonds after a relatively short holding period;
- Recommendation of a commission-based account when the fees generated from a fee-based account would be lower; and
- Failure to monitor the performance of a portfolio or portion thereof after representing to the customer that the positions would be watched for changes.
If you account has been impacted by any of the above activity or you otherwise suspect that your advisor’s recommendations have not been in your best interest, contact the the attorneys at PCJ Law for a free, informative consultation at 901-820-4433.