There has been a great deal of industry feedback on the SEC’s best interest rule already and the comment period has only just begun. One point of contention among many is that the SEC proposal did not define the term “best interest”, leaving it vague and wide open to interpretation. However, that was likely the point, and the SEC may be very clever in doing so. According to Charles Schwab, “Once you define something, then it becomes easier to figure out how not to be engaged in that definition”.
FINSUM: The SEC left the definition of best interest out of the proposal because it wants to make it harder for those in the industry to side-step the regulation. Smart play.