Brokers have followed Regulation Best Interest since June 30, 2020, but the SEC chose not to make them fiduciaries (SEC, Release 34-86031, June 5, 2019); the annuity best-interest rule says it does "not create a fiduciary obligation or relationship" (NAIC Model Regulation 275, 2020).
Four words that sound alike
Salespeople often say "I have to do what's best for you." That sentence can describe four different legal standards. They differ in who is covered, how long the duty lasts, and what happens to conflicts of interest.
From lightest to strictest, in broad terms: suitability, best interest (for brokers and for annuity agents), and fiduciary (for advisers, workplace plans and CFP professionals). The table below sets them side by side.
Suitability: the older floor
Suitability asks whether a recommendation fits you. Under FINRA Rule 2111, a broker must have "a reasonable basis to believe" a recommendation is suitable based on your investment profile, including age, other investments, tax status, time horizon, liquidity needs and risk tolerance (FINRA Rule 2111, checked October 14, 2026).
Since June 30, 2020, Rule 2111 "shall not apply to recommendations subject to" Regulation Best Interest (same source). For retail customers of brokers, suitability has been replaced. It remains in the background for other situations.
Best interest: Reg BI for brokers, Model 275 for annuity agents
Regulation Best Interest (Reg BI) covers brokers recommending securities or account types to retail customers, including rollovers. The broker must act in your best interest and "cannot place its own interests ahead" of yours, through disclosure, care, conflict of interest and compliance obligations (SEC, Release 34-86031, June 5, 2019). The SEC chose not to make brokers fiduciaries (same release).
The NAIC annuity best-interest rule covers insurance agents recommending annuities. The agent must act in your best interest "without placing the producer's or the insurer's financial interest ahead" of yours, through care, disclosure, conflict of interest and documentation obligations (NAIC Model Regulation 275, Section 6.A, 2020). The NAIC describes the 2020 revision as aligned with Reg BI, and 49 jurisdictions had implemented it as of August 2025 (NAIC brief, August 2025).
Three limits make the annuity rule narrower than its name:
- It "does not create a fiduciary obligation or relationship" (Section 6.A(1)(d)).
- The agent compares only products he or she is licensed and authorized to sell (Section 6.A(1)(c)).
- Commissions are not counted as a "material conflict of interest" (Section 5.I(2)).
California's version, effective January 1, 2025, uses the same "does not create a fiduciary obligation" wording (California Insurance Code, Article 9.5, checked October 14, 2026).
Fiduciary: advisers, workplace plans and CFP professionals
Advisers Act fiduciary. A registered investment adviser owes a duty of care and a duty of loyalty that "applies to the entire relationship" and "may not be waived" (SEC, Release IA-5248, June 5, 2019). Conflicts must be eliminated or fully disclosed, with informed consent (same release).
ERISA fiduciary. People who run a workplace plan must act "solely in the interest" of participants and prudently, and must monitor the plan's investment options and service providers (U.S. Department of Labor, Meeting Your Fiduciary Responsibilities, September 2021). Conflicted pay for investment advice is prohibited unless an exemption applies (Federal Register, 91 FR 13503, March 20, 2026).
CFP Board duty. A CFP professional "must act as a fiduciary" at all times when providing financial advice to a client (CFP Board, Code of Ethics and Standards of Conduct, checked October 14, 2026), effective October 1, 2019 and enforced from June 30, 2020 (CFP Board, Miscellaneous FAQ, checked October 14, 2026).
The DOL fiduciary rule: where it stands in October 2026
The Department of Labor's Retirement Security Rule, published April 25, 2024, would have made more rollover and annuity recommendations into ERISA fiduciary advice (Federal Register, April 25, 2024). Two Texas federal courts stayed it on July 25 and 26, 2024. The appeal was dismissed on the Department's motion on November 28, 2025, and the Department published a notice of the court vacatur on March 20, 2026, effective April 20, 2026 (Federal Register, 91 FR 13503). The rule never took effect, and the 1975 five-part test still decides who is an advice fiduciary. As of October 14, 2026, we found no newer rule on this definition in the Federal Register.
What best interest does and does not promise
Best interest is a real step up from suitability. Reg BI covers rollover and account-type advice and requires firms to eliminate sales contests tied to specific securities (SEC Release 34-86031). The annuity rule requires the agent to explain the basis for a recommendation, document it, and weigh surrender charges and lost benefits on any replacement (Model 275, Section 6.A).
What best interest does not promise: an ongoing review, a comparison with products outside the seller's license, or the lowest-cost choice (Model 275, Section 6.A(1)(h) and (i)). A fiduciary duty does not promise low fees either. See Fiduciary, decoded and fee-only vs fee-based.
The comparison table
The six standards, side by side. Each cell summarizes the source cited in the row.
| Standard (source, date) | Who it covers | What it requires | Ongoing or point of sale | Can conflicts remain? |
|---|---|---|---|---|
| Suitability (FINRA Rule 2111) | Brokers, for recommendations not covered by Reg BI since June 30, 2020 | Reasonable basis to believe the recommendation is suitable for your profile | Point of recommendation | Yes |
| Regulation Best Interest (SEC, June 5, 2019) | Brokers recommending securities or account types to retail customers | Best interest; disclosure, care, conflict and compliance obligations | Point of recommendation; no monitoring unless agreed | Yes, disclosed and mitigated; some sales contests must be eliminated |
| NAIC Model 275 best interest (NAIC, 2020) | Insurance agents recommending annuities, in adopting states | Best interest; care, disclosure, conflict and documentation; expressly not fiduciary | Point of sale; no ongoing monitoring duty | Yes; commissions are not a material conflict under the model |
| Advisers Act fiduciary (SEC, June 5, 2019) | Registered investment advisers and their representatives | Duty of care and duty of loyalty over the entire relationship; cannot be waived | Ongoing, within the agreed scope | Only if eliminated or fully disclosed with informed consent |
| ERISA fiduciary (DOL, September 2021) | People who run or advise workplace plans, as defined by law | Solely in participants' interest; prudence; diversification; reasonable expenses | Ongoing | Conflicted pay prohibited unless an exemption applies |
| CFP Board fiduciary duty (CFP Board, October 1, 2019) | CFP professionals giving financial advice | Loyalty, care and following client instructions | At all times when giving financial advice | Must avoid, or disclose, get consent and manage |
Read across a row to see what you are owed, and down the last column to see why disclosure documents matter under every standard.
Red flags
- "Best interest" offered as if it meant "fiduciary."
- A claim that every advisor has had to be a fiduciary since the Labor Department rule; the 2024 rule never took effect.
- An annuity comparison limited to the products one agent can sell, presented as a market-wide comparison.
- No written explanation of why a recommendation is in your best interest.
- A promise of ongoing reviews from someone whose standard carries no monitoring duty, with nothing in writing.
- A replacement annuity recommended without a written look at surrender charges and benefits you would lose.
- Reluctance to say which standard applies to the specific recommendation.
- Commission described as irrelevant because "the rules require me to put you first."
- A dual-registered professional who will not say which account is advisory and which is brokerage.
- Pressure to sign before you have the disclosure documents in hand.
Questions to ask before you sign
- Which standard applies to this recommendation: Reg BI, the state annuity rule, or the Advisers Act fiduciary duty?
- Will you put in writing that you are a fiduciary for this account?
- Will you monitor this after the sale? Where is that written?
- Which products are you not able to offer me, and could any of them fit me better?
- What is the basis for this recommendation, in writing?
- How are you paid on this recommendation, and is the pay higher than on the alternatives?
- If this replaces something I own, what surrender charges and benefits do I give up?
- Does your firm run any sales contests, quotas or bonuses tied to this product?
- Are you a CFP professional, and does that fiduciary duty apply to this advice?
- If I roll money out of my workplace plan, what do I lose compared with staying in it?
Read This Before You Sign
A one-page checklist: the red flags in annuity and indexed universal life (IUL) sales, and the questions to ask before you sign anything. The questions that reveal which legal standard applies to a recommendation, and what it does not promise. We’ll email it to you.
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Sources
- FINRA: Rule 2111, Suitability (checked October 14, 2026)
- SEC: Regulation Best Interest, Release 34-86031 (June 5, 2019)
- FINRA: Regulation Best Interest key topic page (checked October 14, 2026)
- NAIC: Suitability in Annuity Transactions Model Regulation 275 (2020)
- NAIC: Annuity Suitability Best Interest Model Regulation brief (August 2025)
- SEC: Commission Interpretation Regarding Standard of Conduct for Investment Advisers, Release IA-5248 (June 5, 2019)
- U.S. Department of Labor: Meeting Your Fiduciary Responsibilities (September 2021)
- Federal Register: Retirement Security Rule, Notice of Court Vacatur (March 20, 2026)
- CFP Board: Code of Ethics and Standards of Conduct (checked October 14, 2026)
- California Legislative Information: Insurance Code Article 9.5 (checked October 14, 2026)
The Retirement Literacy Foundation is a 501(c)(3) public charity. This page is general education, not tax, legal or investment advice. Nothing is sold here, no product is recommended, and RLF accepts no funding from financial companies. Rules and figures change; each one above shows its source and date. Check anything you plan to act on with your state insurance department or a qualified professional who is not paid on the product.