Fiduciary patchwork to bring confusion for US broker-dealers

Author: John Crabb | Published: 17 Jun 2019

Conflicting rules and regulatory regimes that govern the way broker-dealers advise their clients could prove problematic unless there is some form of coordination between states and agencies.

As it stands, the Securities and Exchange Commission (SEC), the Department of Labor (DoL) and a number of individual states have proposed or implemented separate rules outlining broker-dealers' fiduciary responsibilities, but it remains uncertain how they will function together.

This month the SEC voted to adopt Regulation Best Interest (BI), which was "designed to enhance the quality and transparency of retail investors’ relationships with investment advisers and broker-dealers". This rule came as a replacement for the defunct Fiduciary Standard Rule, which was imposed and then killed by the DoL. 

Following the death of the fiduciary rule, New Jersey introduced its own version of a fiduciary regulation, and similar measures have also been advanced in Maryland, Connecticut and New York. In January Nevada...