Displaying items by tag: massachusetts

(Boston)

Advisors will have likely noticed that Massachusetts has just introduced a new fiduciary rule. The rule, announced on Friday, makes Massachusetts the first state to adopt a best interest standard since courts struck down the DOL’s fiduciary rule. The rule is under the usual attacks from industry trade groups, but more surprisingly, it is also being attacked by fiduciary rule advocates. Such advocates had initially praised the rule’s first draft, but now say the state made too many changes before implementation. According to the Consumer Federation of America “What’s left is a modest improvement on Regulation Best Interest but not the kind of tough standard needed to protect investors from conflicted advice.”


FINSUM: The changes to the rule were significant, such as not applying to insurance product sales and not applying to brokers unless “account monitoring” was specifically specified in the customer contract. The rule takes effect March 6th.

Published in Wealth Management
Wednesday, 28 February 2018 08:12

States are Increasing Enforcement on All Levels

(Boston)

Advisors beware, your state is likely ramping up regulatory enforcement all around you. While all the focus has been on states making and/or enforcing their own fiduciary rules in the absence of the federal rule, they have also been upping their presence in other areas. For instance, Alabama is now getting involved in disputes between brokers and firms, making sure client assets do not get frozen. Massachusetts is enforcing the federal fiduciary rule, and Nevada is making and seeking to enforce its own best interest rule as well.


FINSUM: Our view on this is that there is a power and leadership vacuum in the federal regulators that has eroded states’ trust, all of which is leading to a more fractured regulatory landscape.

Published in Wealth Management
Tuesday, 20 February 2018 12:46

A Groundbreaking Fiduciary Ruling

(Washington)

In what will surely go down as a landmark case, the state of Massachusetts is going after Scottrade in the first prosecution of misconduct under the fiduciary rule. Massachusetts says the broker held sales contests for its reps, before the acquisition by TD Ameritrade in September, which violated fiduciary standards. The state said about the prosecution that “If the Department of Labor will not enforce its own laws and rules, then the states must do what they can to protect retirees from firms who believe they can play with peoples’ life savings by conducting sophomoric contests”.


FINSUM: The developing role of states in both creating and enforcing the fiduciary rule/s is quite interesting. We are afraid the leadership vacuum currently surrounding the federal law might lead to a patchwork nightmare.

Published in Wealth Management

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