If there is one thing the broker-dealer and insurance industries can agree on it’s this: They don't like the broad-based Massachusetts fiduciary proposal, which would blanket their respective industries with a fiduciary standard they’ve been successful in avoiding up until now.

Yesterday, 12 brokerage and insurance trade groups, including the Securities Industry and Financial Markets Association and the Financial Services Institute, submitted a joint letter to Massachusetts Secretary of the Commonwealth William Galvin explaining why he shouldn’t implement his fiduciary rule.

A number of executives from the trade groups are also voiced their opposition at a hearing today on the proposal, which would “deem it an unethical or dishonest conduct or practice for a broker-dealer, agent, investment adviser, or investment adviser representative registered required to be registered in Massachusetts to fail to act in accordance with a fiduciary duty to any customer or client.”

Sifma president and CEO Kenneth E. Bentsen, Jr. argued in testimony at the hearing that Massachusetts should defer to the Securities and Exchange Commission’s Regulation Best Interest, which goes into effect in June. The SEC rule, however, expressly does not impose a fiduciary standard on brokers or agents.

He asked that Massachusetts delay any decision making until after Reg BI is fully implemented and the SEC, Finra, and Massachusetts and other state regulators have the chance to examine firms for compliance.

“Reg BI has meaningfully raised the bar for financial professionals and includes many important investor protections while preserving investor choice,” Bentsen testified. “We are very concerned that the proposal exceeds the state’s authority, will diminish investor access to advice, products and services and will increase investor costs.”

Dale Brown, president and CEO of FSI, testified that the proposal would trigger a fiduciary-level standard where broker-dealers would be unable to provide one-time or occasional advice to clients, even if such advice is in the client’s best interest.

“Massachusetts investors with a smaller amount of investable assets may be especially vulnerable to losing access to their chosen financial professional who can no longer afford to serve them,” Brown said.

In addition to FSI and Sifma, the groups who jointly signed the letter opposing the Massachusetts fiduciary proposal include the American Council of Life Insurers, American Securities Association, Association for Advanced Life Underwriting, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce, Institute for Portfolio Alternatives, Insured Retirement Institute, Life Insurance Association of Massachusetts, National Association of Insurance and Financial Advisors, Small Business Investor Alliance, National Association for Fixed Annuities and NAIFA – Massachusetts.

The letter asserts the industries’ key concerns with the draft regulations, including:

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