Item: Iorio Altamirano LLP
Rating: 5
Author: Christine L.

Suitability / Best Interest

Financial professionals must make suitable recommendations that are in the best interest of the investor. This obligation is mandated by the Securities and Exchange Commission (SEC). That is why financial advisors and brokerage firms ask investors about their risk tolerance, investment objective, investment experience, and more.

FINRA Rule 2111 provides that a recommendation for a specific investment or strategy must be rooted in a broker-dealer’s reasonable basis belief that the recommendation is suitable for the investor based on their investment profile. A customer’s investment profile generally includes the investor’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, and risk tolerance.

FINRA has recently amended the Suitability Rule in response to the Securities and Exchange Commission’s (SEC’s) adoption of Regulation Best Interest (Reg BI). As of June 30, 2020, Reg BI is officially in effect.

Regulation Best Interest is a new standard of care for financial advisors and broker-dealers. Reg BI incorporates and enhances principles that are found in FINRA’s suitability rule (Rule 2111). When a broker-dealer makes an investment recommendation, or a registered investment adviser provides investment advice, the investor is entitled to a recommendation (from a broker-dealer) or advice (from an investment adviser) that is in the best interest of the investor, and that does not place the interest of the financial professional or financial institution ahead of the interests of the retail investors.

The “best interest” standard is not limited to “recommendations” to purchase a security. It also applies to recommendations to sell or hold a security. Additionally, it applies to recommendations to purchase, sell, or hold an investment strategy. Reg BI also explicitly applies to recommendations of types of accounts, including brokerage accounts and investment advisory accounts.

Regulation Best Interest has four core obligations:

Disclosure: A broker-dealer or financial advisor is required to provide in writing, full and fair disclosure of certain information to investors before or at the time of the recommendation. First, a broker-dealer or financial advisor must provide all material facts that relate to the scope and terms of the relationship between the investor and the firm. This obligation includes disclosing material fees and costs and the scope of services provided to retail customers. Second, a broker-dealer or financial advisor is required to disclose all material facts that relate to any conflicts of interest that exist in connection with the recommendation. For example, if a broker-dealer recommends that you buy a bond that it also underwrote, it must disclose that fact to you at the time of the recommendation.
Care: A broker-dealer or financial advisor must exercise reasonable diligence, care, and skill in connection with making a recommendation. That is, the advisor must understand the potential, risks, rewards, and cost associated with a particular recommendation, and have a reasonable basis to believe that the recommendation is in the best interest of the investor based on the customer’s investment profile. The investor’s financial interest must be placed ahead of the firm’s and/or financial advisor’s financial interests. For example, if a financial advisor recommends the purchase of a risky investment to a conservative investor, the broker-dealer has not fulfilled their care obligations.
Conflict of Interest: A broker-dealer must establish, maintain, and enforce written policies and procedures reasonably designed to address conflicts of interest.
Compliance: A broker-dealer must establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Regulation Best Interest.

If your financial advisor recommended an investment, investment strategy, or account that was not in your best interest and you have suffered investment losses, contact Iorio Altamirano LLP for a free case evaluation. We are investor advocates, and we are here to keep Wall Street honest.

★★★★★

August Iorio is a wonderful, very competent attorney. He helped me through a very complicated financial situation to a result that benefitted me greatly. He is responsive, efficient, and very accommodating to my personal situation. I highly recommend him. Christine L.

I was impressed with August Iorio's directness and clarity in explaining the claim process and how it might work out. I also appreciated his promptness in getting back to me when I had questions or other concerns. Iorio Altamirano LLP is very good at what it does. Art H.

August Iorio was the lead on our case. His professional demeanor, partnered with his responsiveness to our questions, suggestions, and ideas made us feel as if we were a team with a common goal. He always kept us updated and informed and gave us realistic expectations which resulted in a timely, fair, and suitable settlement. We highly recommend the law firm of Iorio Altamirano LLP. EB & SB

August, I truly appreciate all you have done for me! Thank you. Carol P.

We had a wonderful experience with Mr. Jorge Altamirano, who is an excellent and competent lawyer. He took care of our case with high effectiveness and professionalism. Mr. Altamirano is always available to answer any questions from his clients and always provided us the appropriate follow-up in our case. It was an honor to have his professional services. Ana & Rolando M.

My experience in the past with attorney Jorge Altamirano, was excellent. He was highly competitive and professional. He was attentive, communicative, respectful, and kind from beginning to the end of resolution of my case. One of the most impressive attributes of this gentleman was his empathetic demeanor towards me, his calmness throughout all the process of my case. Dr. Mayra R.

The professional and outstanding guidance and assistance that Jorge Altamirano provided during my case was a key element towards a favorable negotiation. He was always vigilant of the case deadlines. I would work with him again in the future. Johnny M.

In our case, Mr. Altamirano showed integrity and professionalism, which without a doubt will help your future outcome. Ciso C.

Mr. Altamirano is very knowledgeable, responsible and reliable. I am very satisfied and grateful with the outcome of my case. Elsie D.

People who are the victims of broker fraud have to go through a complicated arbitration process which requires them to trust their attorney and take a lot on faith. August Iorio worked with me and my wife navigate the process, helping us get all the information his firm needed for what turned out to be a successful outcome. He was understanding and professional every time we dealt with his firm. Mitchell & Irene F.

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