The Insurance industry is concerned about the Massachusetts Fiduciary Proposal. The concern, coming from industry professionals around the US, is that there will be an unintended consequence of the proposed fiduciary duty that will severely limit access to professional investment advisors.
Offering best advice for the customers, on the face of it seem good. So, what’s the problem? The regulation is more stringent than the SEC’s regulation best interest and as strict as the RIA’s fiduciary standard.
Investment advisors would be out of business if little of their advice benefitted their clients, but with the rule requiring every financial recommendation and advice to be based on ..”what is best for the customers and clients, without regard to the interests of the broker-dealer, advisory firm and its personnel”. Many are concerned that firms will stop doing business in the state.
Consumer advocates said aligning the fiduciary standards with the RIA’s will reduce investor confusion about standards of care.
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