NJ Fiduciary Plan ‘Far Exceeds’ Other Rules: Lawyers
April 24, 2019 by Melanie Waddell
New Jersey’s newly proposed uniform fiduciary plan “far exceeds” the Securities and Exchange Commission’s Regulation Best Interest as well as the Labor Department’s now defunct fiduciary rule, according to a recent analysis by Groom Law Group.
“New Jersey believes that a uniform standard of care is necessary for the provision of securities recommendations — and that such standard must be a fiduciary one,” the attorneys write in their Groom Benefits Brief.
The “Fiduciary Duty of Broker-Dealers, Agents, Investment Advisers, and Investment Adviser Representatives” proposal:
- includes an expansive definition of what constitutes a “recommendation”;
- imposes a uniform fiduciary duty on brokers and advisors; and
- creates presumptive breaches if brokers and advisors do not recommend the best reasonably available option and fee arrangement.
Unlike Maryland, whose fiduciary legislation was torpedoed by the state’s Senate Finance Committee on April 4, New Jersey “doesn’t need votes, per se, just to follow their administrative law in promulgating a regulation and hoping it stands up in court,” George Michael Gerstein, co-chair of Stradley Ronon’s fiduciary governance group, told ThinkAdvisor in a recent interview.