Massachusetts Steps Closer to Stricter, Uniform Fiduciary Standard
December 3, 2019 by John Manganaro
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 Commonwealth.
Secretary Galvin said his approval of the proposed fiduciary rule now allows for a formal comment period and eventually for the actual rule text to be promulgated.
“I am proposing this standard because the SEC has failed to provide investors with the protections they need against conflicts of interest in the financial industry with its ‘Regulation Best Interest’ rule,” Galvin said in announcing his decision to advance the proposed rule. “My office has seen firsthand the serious financial harm that investors and savers have suffered as a result of conflicted financial advice. Investors must come first.”
Technically, the state can now offer for comment proposed amendments to two rules known as “950 CMR 12.204” and “950 CMR 12.205,” while adding a new rule “950 CMR 12.207.” Broadly speaking, the proposal would require advisers, brokers and other financial professionals to adhere to a fiduciary conduct standard when dealing with their customers and clients.
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