Financial Advisor (FA) ran the following article highlighting the several industry trade groups, including NAFA, who jointly signed the letter opposing the Massachusetts fiduciary proposal.
January 7, 2020
If there is one thing the broker-dealer and insurance industries can agree on it’s this: They don’t like the broad-based Massachusetts fiduciary proposal, which would blanket their respective industries with a fiduciary standard they’ve been successful in avoiding up until now.
Yesterday, 12 brokerage and insurance trade groups, including the Securities Industry and Financial Markets Association and the Financial Services Institute, submitted a joint letter to Massachusetts Secretary of the Commonwealth William Galvin explaining why he shouldn’t implement his fiduciary rule.
A number of executives from the trade groups are also voiced their opposition at a hearing today on the proposal, which would “deem it an unethical or dishonest conduct or practice for a broker-dealer, agent, investment adviser, or investment adviser representative registered required to be registered in Massachusetts to fail to act in accordance with a fiduciary duty to any customer or client.”
Sifma president and CEO Kenneth E. Bentsen, Jr. argued in testimony at the hearing that Massachusetts should defer to the Securities and Exchange Commission’s Regulation Best Interest, which goes into effect in June. The SEC rule, however, expressly does not impose a fiduciary standard on brokers or agents.
He asked that Massachusetts delay any decision making until after Reg BI is fully implemented and the SEC, Finra, and Massachusetts and other state regulators have the chance to examine firms for compliance.