Practical Compliance & Risk Management: Best Execution

Practical Compliance & Risk Management: Best Execution

In the financial services world, we frequently hear the mantra that advisers, as fiduciaries, have an obligation to seek “best execution” in relation to their clients’ transactions. In meeting this obligation, an adviser must execute securities transactions for clients in such a manner that the clients’ total cost or proceeds in each transaction is the most favorable under the circumstances. In assessing whether this standard is met, an adviser should consider the full range and quality of a broker’s services when placing trades, including, among other things, execution capability, commission rate, financial responsibility, responsiveness to the adviser, and the value of any research services provided.