Best execution for investment advisers ‐ The goal and the process

Abstract

What exactly is the best execution duty of investment advisers? There is no clear consistent definition relied upon by regulators and courts and it has assumed different forms in different cases with different facts. Nevertheless everyone understands that it is an integral part of the fiduciary duty of an investment adviser. This article will endeavor to answer the question with an emphasis on the dynamic process by which an adviser can achieve best execution and monitor its compliance on an ongoing basis responding to changes in regulation, markets, and its own operations. The discussion of statutory standards in this article will refer to the fiduciary standards imposed on investment advisers pursuant to the Investment Advisers Act of 1940, as amended, (the “Advisers Act”) as interpreted by the Securities and Exchange Commission (the “SEC”) and will not address the additional requirements that may be imposed by other federal statutes on advisers providing services to certain types of clients such as the Investment Company Act of 1940, as amended, and Employee Retirement Income Security Act of 1974, as amended.

Citation

Paradis, M.R.A. (2004), "Best execution for investment advisers ‐ The goal and the process", Journal of Investment Compliance, Vol. 5 No. 1, pp. 20-24. https://doi.org/10.1108/15285810410635984