Compliance with the Securities and Exchange Commission’s (SEC) Regulation Best Interest (Reg BI) principles are critical to your firm building trust and safeguarding client interests.
During our recent “Best Interest Principles: DOL Fiduciary and SEC Perspectives” webinar, hosted in partnership with InvestorCOM, industry experts talked about Reg BI and its intersection with the Department of Labor’s (DOL) fiduciary rule, offering practical insights.
Building an efficient Regulation Best Interest process
We polled the audience on whether their firm has a consistent process for making a best interest recommendation. The results?
- Yes, we leverage a technology application. – 44%
- Yes, its manual (e.g. PDF, Excel) – 49%
- No, we do not have a process in place. – 7%
While 93% of attendees in our webinar acknowledge having a best interest recommendation process, the poll revealed a stark divide: nearly half rely on manual methods like PDFs and Excel spreadsheets. While these tools have their place, relying on them for Reg BI compliance can be detrimental to your firm’s success and compliance.
Manual processes can create gaps in your firm’s Reg BI process. These gaps might include:
- Human error
Data entry mistakes, missed steps, and inconsistent application of criteria can lead to inaccurate recommendations and potential regulatory scrutiny.
- Inefficiency
Manual processes take time and resources, diverting valuable staff focus from client interaction and strategic tasks.
- Lack of auditability
Documentation may be scattered, making it difficult to prove due diligence and reconstruct decision-making processes in case of an audit.
- Limited scalability
As your business grows, managing best interest recommendations manually becomes unwieldy, potentially leaving clients waiting and increasing the risk of errors.
It’s quite clear that while manual processes can be low-cost, familiar, and comfortable, they can make your firm’s Reg BI process vulnerable. Automating your firm’s Reg BI process can help your firm avoid these pitfalls altogether, offering:
- Enhanced accuracy
Technology eliminates human error in data entry and calculations, ensuring consistent and compliant recommendations.
- Streamlined workflows
Automated tools guide advisors through the BIR process, saving time and minimizing errors.
- Comprehensive documentation
Every step of the decision-making process is automatically recorded, providing a clear audit trail for regulators.
- Scalability
Automation easily adapts to growing client bases and complex compliance requirements, empowering your firm to navigate regulatory changes with confidence.
Embracing automation empowers you to navigate the regulatory landscape with confidence, enhance client service, and boost your bottom line.
Reg BI compliance with COMPLY
In the rapidly evolving financial landscape, staying ahead means adapting quickly.
COMPLY, in partnership with InvestorCOM, presents a suite of revolutionary tools: RolloverAnalyzer, Rollover Dashboard, and PeerCompare. Tailored for wealth managers, these solutions transform compliance into an opportunity for growth. By efficiently generating compliant disclosure documents, our products not only ensure adherence to Reg BI, DOL Rule PTE 2020-02, and other key regulations, but also serve to produce powerful advisory assets.
Are you ready to partner with COMPLY and streamline your firm’s journey towards successful and confident Reg BI compliance? Let’s talk!