The Consumer Federation of America is also supporting the Maryland fiduciary provision.
“To the extent the federal government does not protect investors from the harmful effects of conflicts of interest, it’s entirely appropriate for the states to step in and fill the void,” said CFA’s Financial Services Counsel Micah Hauptman. “If the states step in, it’s important that they get it right, and the DOL fiduciary rule provides the perfect model.”
“The Maryland commission put out a strong recommendation in this area,” added Barbara Roper, CFA director of investor protection. “The wording of the actual proposed statute will need to be cleaned up to achieve the intended goal.”
The legislation would implement provisions proposed by the Maryland Financial Protection Commission, which was formed to propose and preserve financial protections put in place by the Dodd-Frank Act, post market meltdown.
The bill is expected to come up for vote in the Senate Finance Committee the first week of March.
While the DOL proposed a fiduciary standard for advisors who work with qualified retirement assets, the effective date of important parts of the rule have been delayed until July 2019 to give the agency time for review, as directed by President Trump.
The SEC has indicated that it will propose a best-interest rule by the second half of this year.