Massachusetts Secretary of the Commonwealth William Galvin has signed off on a proposed rule that would impose a fiduciary conduct standard for broker-dealers, agents, investment advisers and investment adviser representatives providing financial advice to clients in the state.
The proposal will impose a uniform fiduciary conduct standard on broker-dealers, agents, investment advisors and investment advisor representatives providing financial advice to any clients in Massachusetts.
If the rules become law, financial recommendations and advice must be based on “what is best for the customers and clients, without regard to the interests of the broker-dealer, advisory firm and its personnel,” Galvin said.
A public hearing will be held on the proposal next month, Galvin said Monday, with adoption to follow as soon as Feb. 1.
Below is a statement from Financial Services Institute (FSI) President & CEO Dale Brown:
“Based on the initial proposal, we have significant concerns about the impact that Massachusetts’ fiduciary rule will have on Main Street investors in the Commonwealth who are working to achieve their financial goals.
“The SEC’s Regulation Best Interest (Reg BI) establishes a national standard that enhances investor protection while preserving access to professional financial advice. Massachusetts’ proposal creates differing requirements from those established by Reg BI. This will ultimately limit services and drive up costs for investors through increased confusion and higher compliance costs for financial advisors.
“Our members are diligently working toward compliance with Reg BI, and we strongly encourage Massachusetts to align its requirements with those of the SEC and other existing regulations. We stand ready to work with the Securities Division on a solution.”