How does the RIBO Act ensure transparency in broker-client relationships?

The RIBO Act promotes transparency in broker-client relationships primarily through mandatory disclosures regarding fees, commissions, and potential conflicts of interest. This requirement ensures that clients are fully informed about the costs associated with their brokerage services, enabling them to make well-informed decisions. By disclosing relevant financial information, brokers are held accountable, and clients can better understand how their interests align—or might diverge—from those of the broker.

Transparency is essential in maintaining trust and integrity within these relationships. The disclosures required by the Act help prevent misunderstandings and foster an environment where clients feel more secure in their dealings with brokers. When brokers clearly communicate the details surrounding fees and commissions, along with any potential conflicts of interest, clients are empowered to assess the information and engage in discussions about their options.

The other choices do not enhance transparency. Concealing fees or signing non-disclosure agreements would obscure important information from clients, undermining trust. Limiting the information brokers can provide would similarly weaken transparency, inhibiting clients from making informed decisions about their investments.