Ep #264: The Significance of the Reg BI Challenge with Michael Kitces
July 15, 2020
We’re thrilled to welcome back XYPN co-founder and Industry Guru, Michael Kitces, to the show today to talk through XYPN’s lawsuit against the SEC. As you may be aware, in September 2019, XYPN challenged the Regulation Best Interest rule in federal court. After months of litigation, we officially received a ruling against us in late June 2020.
Today, Michael shares what that ruling means and how XYPN plans to respond to it. He addresses common concerns from advisors including how this impacts them, why they should care, and how to differentiate from non-fiduciary advisors. Additionally, Michael discusses XYPN’s continued advocacy outside of the lawsuit, how the industry will likely respond, and how he hopes XYPN can engage our membership base to make meaningful changes.
Per usual, he has great advice and reminders: niched services are an advisor's best differentiator and how we should all be committed to seeing advice being fiduciary, through and through.
If you’re interested in learning more about the importance of this lawsuit, this episode is for you.
Listen to the Full Interview:
What You'll Learn from This Episode:
- An update of where XYPN stands in the Reg BI lawsuit (00:02:37)
- Why XYPN decided to sue the SEC over Reg BI and how the Reg BI usage of “best interest” didn’t actually match the fiduciary “best interest” standard (00:06:13)
- How XYPN could have standing but still not win at the appeals court (00:16:39)
- What would have been the impact on the industry had the courts ruled in favor of XYPN (00:20:40)
- Why, because of changing in rules and regulations, advisors should not rely on differentiating themselves on their fiduciary duty to clients, but rather their niche (00:30:03)
- Why advisors should care about Reg BI and the impact it has on fiduciaries (00:34:53)
- What advisors can do in terms of advocacy work at the state level (00:42:11)
- When XYPN plans to make a decision about the Reg BI lawsuit and Michael’s continued involvement on the advocacy-front (00:51:30)
Featured on the Show:
- Michael Kitces: Website | Twitter | LinkedIn | Facebook
- Regulation Best Interest
- “The Market for "Lemons": Quality Uncertainty and the Market Mechanism” by George A. Akerlof
This Episode is Sponsored By:
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