Regulation Best Interest (Reg BI).

An SEC rule requiring broker-dealers to act in a retail customer's best interest when making a recommendation, and to disclose their conflicts.

Also called Reg BI

Drafted with AI assistance. Not yet reviewed by a person · Last updated August 23, 2026

Source: U.S. Securities and Exchange Commission

In plain English

Regulation Best Interest is an SEC rule that sets the standard of conduct a broker-dealer owes a retail customer when it makes a recommendation. It has four obligations: disclosure, care, conflict of interest, and compliance. In plain English, the firm has to tell you how it gets paid, consider reasonable alternatives, and put your interest ahead of its own revenue when it recommends a product or an account type. Firms also hand retail customers a short summary called Form CRS that lists services, fees, and conflicts. Reg BI attaches to recommendations, not to every conversation, and it is a point-in-time conduct standard rather than an ongoing duty to monitor your account.

Most useful ages

22 to 70

01Why it matters

It changes what a broker has to weigh before recommending a rollover or a product, and it puts the compensation on paper, so a conflict that once stayed quiet now has to be disclosed to you in writing.

02The math, step by step

Say a broker can place your 40,000 dollar rollover in Product A, which pays the firm 1.5 percent up front, or Product B, which pays 0.5 percent. That is 600 dollars against 200 dollars of firm revenue. Under Reg BI the broker has to consider reasonable alternatives and be able to show why the pick fits you, not just why it pays 400 dollars more.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

Do not confuse with The fiduciary standard that applies to investment advisers

It is not the same as the fiduciary duty a registered investment adviser owes. That duty runs for the life of the advisory relationship and covers ongoing management. Reg BI attaches to a specific recommendation at a point in time. Both sit above the older suitability rule, but they are different standards with different scope.