AARP, Consumer Federation of America, and the Financial Planning Coalition on September 11, 2018, delivered the results of independent usability testing of the Securities and Exchange Commission’s proposed Customer Relationship Summary (CRS). The results of this testing clearly indicate the need for the Commission to revise and retest the content, language, and format of the CRS. Recognizing the important role the CRS plays in the Commission’s proposed Regulation Best Interest, the organizations hired Kleimann Communications Group, Inc. to conduct usability testing of the proposed disclosures.
The purpose of the testing was to determine whether typical investors would be able to make an informed choice between a brokerage account and an advisory account based on the disclosures provided in the CRS. In particular, testing focused on whether investors understood key differences in the two types of accounts, whether they understood the different standards of care that would apply, and whether they understood that broker-dealers are not required to provide ongoing account monitoring. The testing demonstrated that many, if not most, investors failed to understand this key information and, therefore, could not use the CRS to make an informed choice of accounts.