Broker-dealers and agents licensed by Massachusetts could face enforcement actions if they fail to adhere to the state’s new fiduciary standard for investment advice, Ignites reported in a Sept. 4 article titled “First State Fiduciary Rule Becomes Enforceable.” Remarks from asset management partner Brian McCabe are included in the piece.
The Massachusetts rules imposes a higher standard on brokers than the Securities and Exchange Commission’s Regulation Best Interest, which the agency began enforcing in June. The SEC’s rule requires that broker-dealers put clients’ interests before their own.
But the state should also expect legal resistance from firms, Brian states. “As a practitioner, it’s a lot easier to have one source of law to look to,” he adds. “The prospect of having a federal overlay and then 50 different flavors … I think is daunting.”
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