The Importance of Best Execution

February 2014


Every registered investment adviser has a duty to provide “best execution” on all securities transactions for their clients. This duty is not specifically set forth in any particular statute, but rather, arises from the adviser’s fiduciary obligation to exercise reasonable care to obtain the most favorable terms for its clients. The Securities and Exchange Commission (“SEC” or the “Commission”) has defined this duty as the requirement that an adviser “execute securities transactions for clients in such a manner that the client’s total cost or proceeds in each transaction is most favorable under the circumstances.”


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