fb-roll-0006

status: publishedversion: v1corpus: 2026.9key: derivedseverity: high

Scenario (all facts stipulated)

{
  "arrangement": "An Investment Professional recommends that a 61-year-old participant roll her low-cost 401(k) into a proprietary IRA program paying the firm substantially higher fees.",
  "stipulated_facts": [
    "The recommendation was made without regard to the investor's stated objectives, risk tolerance, financial circumstances, or needs — the same program is recommended to every prospect, and the analysis file contains no consideration of her situation.",
    "The recommendation placed the firm's compensation interest ahead of the investor's interest; the IRA offers her no offsetting benefit over the plan.",
    "All written disclosures and the rollover-reason documentation were technically produced and delivered on time; compensation is within reasonable-compensation limits; no affirmatively false statement was made."
  ]
}

Question posed to the model under test

Judged only against the PTE 2020-02 conditions quoted in this item's sources, which conclusion follows about this arrangement? Answer with exactly one option id.

Answer options

satisfies-conditions — The stipulated facts satisfy the quoted conditions
fails-best-interest — It fails the Best Interest standard of the Impartial Conduct Standards (Section II(a)(1))
fails-misleading-statements — It fails the no-materially-misleading-statements standard (Section II(a)(3))
fails-pre-rollover-disclosure — It fails the pre-rollover disclosure condition (Section II(b)(3))

Answer key

fails-best-interest

Derivation from the cited text

The quoted Best Interest standard requires advice based on the investor's objectives, risk tolerance, financial circumstances, and needs, that does not place the firm's interests ahead of hers. The stipulated facts state the recommendation ignored her situation entirely and placed the firm's compensation interest first. Paperwork delivered on time does not cure a conduct-standard failure — disclosure and documentation are separate conditions, each stipulated satisfied here.

Rubric

Selects fails-best-interest; timely paperwork does not cure a Best Interest failure.

Cited primary sources (quote-gated)

PTE 2020-02, 85 FR 82798 · Section II(a)(1)

“based on the investment objectives, risk tolerance, financial circumstances, and needs of the Retirement Investor, and does not place the financial or other interests of the Investment Professional, Financial Institution or any Affiliate, Related Entity, or other party ahead of the interests of the Retirement Investor”

Each quoted passage is exact-matched, after typographic normalization, against the corpus text fetched from the issuing authority (hashes in the corpus manifest). An item whose quote stops matching fails the build.

Verification record

generator: claude-fable (session 2026-09-01)disagreements: 0controls: fb-2026-09-c (3/3 caught)adjudicated by: — (none required or pending)

gemini-3.1-pro-previewagrees the key is correctquote matched

“based on the investment objectives, risk tolerance, financial circumstances, and needs of the Retirement Investor, and does not place the financial or other interests of the Investment Professional, Financial Institution or any Affiliate, Related Entity, or other party ahead of the interests of the Retirement Investor” — dol-pte-2020-02

The answer key correctly identifies that the stipulated facts directly violate the Best Interest standard defined in Section II(a)(1) of PTE 2020-02, which requires advice to be based on the investor's objectives, risk tolerance, financial circumstances, and needs, and prohibits placing the firm's interests ahead of the investor's.

deepseek-v4-proagrees the key is correctquote matched

“based on the investment objectives, risk tolerance, financial circumstances, and needs of the Retirement Investor, and does not place the financial or other interests of the Investment Professional, Financial Institution or any Affiliate, Related Entity, or other party ahead of the interests of the Retirement Investor” — dol-pte-2020-02

The Best Interest standard in Section II(a)(1) requires advice to be based on the investor's objectives, risk tolerance, financial circumstances, and needs, and not place the firm's interests ahead of the investor's. The stipulated facts state the recommendation ignored her situation entirely and placed the firm's compensation interest ahead of hers. Therefore it fails the Best Interest standard. The other conditions are stipulated satisfied, so no other option follows.

Version history & errata

v1; no errata. Demonstrate a key error and the correction is published here, credited — challenge policy.