The AARP is the latest group to slam the SEC’s proposed Regulation Best Interest, calling for the regulator to further revise as well as retest at least one major part of it to address what it claims is a lack of clarity among investors.

According to a survey conducted on behalf of AARP and the Certified Financial Planner Board of Standards, Inc. by the Kleimann Communications Group, the SEC’s proposed Customer Relationship Summary, despite getting revised, is still confusing to investors, AARP says in a press release accompanying the report.

Despite “simpler language” and changes to the format of the CRS, consumers still had “low comprehension,” according to the survey, which tested participants in Denver, Colo., Tulsa, Okla., and St. Louis, Mo. Consumers also had a hard time understanding broker-dealers’ legal obligations, AARP says.

And while respondents had a “vague” notion that a conflict of interest would harm them and that they would want their own interests to come first, they nonetheless didn’t understand what having a conflict of interest meant, the survey found.

Finally, the revised form left consumers confused about fees and cost, with nearly all the respondents expressing surprise at the fees described in the form, AARP says.

“Investors deserve a clear definition of best interest advice,” AARP executive vice president Nancy LeaMond says in the press release. “Although we recognize that achieving such a definition is no easy task, AARP believes that for the regulation to be effective, the SEC should adopt more meaningful standards and useful forms.”


The AARP recommends several steps the SEC can take to address the form’s perceived shortcomings. Among them are suggestions to better distinguish between investment advisor accounts and broker-dealer accounts, clarify legal obligations and conflicts of interest and standardize titles, according to the study.

The AARP is far from alone in taking issue with Form CRS. Earlier this month, the Investment Adviser Association called for the form to be simplified, after concluding that investor testing of the form conducted for the SEC by the RAND Corporation had been flawed.