Maryland is the latest state to introduce a fiduciary standard.
This week, State Senator Jim Rosapepe introduced the Financial Consumer Protection Act of 2019, aimed at strengthening consumer protections in certain areas, such as mobile home purchases, vehicle purchases and financial transactions. It includes a section establishing that certain people are fiduciaries, including broker/dealers, broker/dealer agents, insurance producers, investment advisors, federally covered advisors and investment advisor representatives.
Under the legislation, fiduciaries are required to act in the best interest of their clients, without regard to financial or other interests of the person or firm providing the advice.
The standard is similar to the one proposed in Nevada. Like Nevada, there’s no exemption for retirement plan advisors.
When an appeals court vacated the Department of Labor’s fiduciary rule last year, many states decided to take the fiduciary issue into their own hands. Then, the Securities and Exchange Commission put forth a rule package that would require brokers and advisors to act in their clients’ best interests, falling short of what consumer advocates would call a “fiduciary rule.”
The SEC’s rule is expected to be finalized by fall 2019.