Fred Reish Shares Considerations for Investors under Reg BI with CNBC

In their coverage of the Securities and Exchange Commission’s upcoming Regulation Best Interest (Reg BI), CNBC turned to partner Fred Reish for insight into considerations for investors under the rule.

Starting June 30, financial advisors who are affiliated with broker-dealers legally will be required to place clients’ interests first when they give financial advice under Reg BI.

Reish told CNBC that it will ultimately be up to the investor to determine whether they can trust their financial advisor, by asking better questions that go beyond just “Are you acting in my best interest?”

He highlighted two questions that should be at the top of an investor’s list:

• How much do you get paid?
• How much do you make if I accept this recommendation?

Investors must understand that the compensation an advisor receives for a recommendation can cause a conflict of interest, he said. Further, higher investment expenses sap returns over time.

“A lot of people feel awkward asking that question; they feel it’s not polite,” Reish said. “But it’s their money, and they need to know the answer.”