The impartial conduct standards enacted by the Department of Labor as part of the Best Interest Contract Exemption required all of the following except which?

The impartial conduct standards enacted by the Department of Labor as part of the Best Interest Contract Exemption required all of the following except which?

• A. Eliminate conflicts of interest
• B. Give advice in the client’s best interest
• C. Charge reasonable compensation
• D. Do not make misleading statements

Answer: (A)

Impartial conduct standards focus on how a fiduciary must interact with a client when providing retirement investment advice. They require that the advice be given in the client’s best interest, that the advisor’s compensation be reasonable, and that the advisor do not make misleading statements. These standards also address conflicts of interest by requiring disclosure and that conflicts not improperly influence the advice; however, they do not require eliminating conflicts of interest entirely. In practice, conflicts can exist if they’re disclosed and properly managed, so the notion of completely eliminating conflicts is not a stated requirement. The other standards—best-interest advice, reasonable compensation, and no misleading statements—are indeed part of the impartial conduct standards.

Impartial conduct standards focus on how a fiduciary must interact with a client when providing retirement investment advice. They require that the advice be given in the client’s best interest, that the advisor’s compensation be reasonable, and that the advisor do not make misleading statements. These standards also address conflicts of interest by requiring disclosure and that conflicts not improperly influence the advice; however, they do not require eliminating conflicts of interest entirely. In practice, conflicts can exist if they’re disclosed and properly managed, so the notion of completely eliminating conflicts is not a stated requirement. The other standards—best-interest advice, reasonable compensation, and no misleading statements—are indeed part of the impartial conduct standards.