Toward the end of 2018, we shared with you a quick overview of the legislative changes made in New York regarding the “best interest” standard for fiduciaries that included a guide to help you determine what steps to take to prepare for said changes. Since then, Nevada state legislators have passed a law that requires all brokers and advisors to be held accountable to a strict fiduciary standard.
We know change is coming, but why are states rolling out these new regulations now?
The regulations follow the Department of Labor fiduciary rule that went into effect in June 2017, passed by former President Obama. Enforcement of this rule has since been delayed with President Trump in office. So, states are being proactive and taking matters into their own hands to ensure compliance ahead of time rather than waiting until the rule starts getting strictly enforced. The state of New York has even urged the National Association of Insurance Commissioners (NAIC) to adopt its best interest rule, too.
How do folks within the industry feel about these changes?
Thus far, these enhanced regulations have been receiving mixed reviews. While some industry professionals find them to be burdensome to implement and follow, others find them to be both valuable and necessary for the betterment of the industry.
While it’s still unclear whether the NAIC will heed New York legislators’ request, the ripple effect of change will likely continue state by state as we’ve seen with Nevada. Don’t get caught off-guard if your state is next.