Investment advice question may enhance Reg BI with digital type offerings (InvestmentNews)

Last month’s SEC request for comments on the digital engagement practices of firms is likely to raise high level discussions at the regulator about the application of the investment advice standard and Regulation Best Interest (Reg BI). What’s at stake is whether online platforms and associated apps offered by advisers and broker-dealers constitute investment recommendations, which may influence investors’ decision-making as amplified through “gamification” features. FrontLine’s Founder and President comments that the review of industry digital practices is an opportunity for the SEC to enhance Reg BI. Ms. Lynch describes an example of a trading platform that could be viewed as providing investment advice if it detects that a customer prefers the telecom sector and then starts highlighting telecom stocks, in turn potentially triggering obligations under Reg BI. See InvestmentNews, “SEC inquiry into online brokers could redefine recommendations“