Reflection of a building on a body of water.
2019 Sustainability Financial Industry

A Breath of Fresh Air

There's something encouraging and refreshing about the sight of cherry blossoms blooming anew in our nation's capital after a long winter. 

I feel the same about the news that two financial services regulators are planning to cooperate in an effort to help simplify things for individual investors and their advisors. 

As Think Advisor recently reported, the Financial Industry Regulatory Authority (FINRA) is planning to revamp or eliminate its existing suitability rule once the U.S. Securities and Exchange Commission's pending Regulation Best Interest rule (Reg BI) is finalized. 

While speaking at the Securities Industry and Financial Markets Association's annual compliance conference, Robert Colby, FINRA's chief legal officer, said: "There's a lot of overlap between the existing suitability rule and the direction that Reg BI is going."

After Reg BI is finalized, Colby said FINRA will "look to see first, is there anything different between our [suitability] rule and the way it [Reg BI] comes out? We'll fix that because we'll be enforcing Reg BI and we don't want to be inconsistent in any way." If FINRA decides to keep its suitability rule, "we want to make sure they are completely aligned," Colby added. 

Now, if only the US Department of Labor could take a similar approach to regulations governing the management of Individual Retirement Accounts, our industry could get closer to something investors and advisors would greatly appreciate – more consistent and clearer rules around the many different types of accounts available to them. 

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