Under the Best Interest Contract Exemption, what must financial institutions ensure with their advisors?

The Best Interest Contract Exemption (BICE) is a provision that allows financial institutions to receive compensation for recommending retirement investment products, provided that they adhere to specific standards that prioritize the interests of their clients. One of the key requirements under this exemption is compliance with impartial conduct standards. These standards mandate that advisors act in the best interests of their clients, provide advice that is relevant and appropriate for the client's circumstances, and charge only reasonable compensation for their services.

By ensuring compliance with impartial conduct standards, financial institutions and their advisors are held accountable for providing quality advice that aligns with the client's best interests rather than their own financial incentives. This is crucial for maintaining trust and integrity in the financial advisory profession, especially in the context of retirement planning.

The other options do not accurately reflect the core requirements of the BICE. For instance, approval from the SEC is not a necessity to fulfill the BICE, and the focus of BICE is not on promoting one's own investment products or just adherence to industry practices—it's specifically about ensuring that advice is given impartially and in a manner that truly serves the client's needs.