Deposit Bonds
Updated
by
Caroline Pollard
Deposit Bonds Compliance
- Best Interests Duty (BID)
- Even for deposit bonds, brokers must:
- Act in the best interests of the client, not the provider.
- Clearly document why a deposit bond is suitable for the client’s needs
- Even for deposit bonds, brokers must:
- Responsible Lending Conduct
- While deposit bonds don’t involve lending money, brokers should still:
- Assess the client’s financial situation.
- Ensure the bond is appropriate and not misleading.
- Explain the risks and obligations (e.g., the bond is a guarantee, not a payment)
- While deposit bonds don’t involve lending money, brokers should still:
- Disclosure Obligations
- Provide clear, written disclosure about:
- Fees and commissions
- The nature of the deposit bond
- Any potential conflicts of interest
- Provide clear, written disclosure about:
- Record Keeping
- Maintain detailed records of:
- Client fact finds and needs analysis
- Product comparisons (if applicable)
- Signed disclosures and consent forms
- Communication logs
- Maintain detailed records of:
