Los Angeles partner Fred Reish was quoted in a ThinkAdvisor article titled “Maryland's 'Sweeping' Fiduciary Bill Puts Advisors Under More Stringent Standard.” The article discusses Maryland proposing a bill that, if passed as written, would not only have a profound impact on the financial services and insurance industries in the state, but would also put advisors in the state under more stringent fiduciary requirements.
Maryland’s Financial Consumer Protection Act of 2019 includes a section that would make broker-dealers, broker-dealer agents, and insurance producers fiduciaries. It also incorporates a suggestion by the Maryland Financial Consumer Protection Commission to beef up the state’s advisor fiduciary rules.
Fred noted that, under Maryland’s bill, the Maryland Commissioner of Financial Regulation “may adopt regulations to carry out the fiduciary duty” required under the bill.
“We are left to wonder how the standard will be defined,” Fred said. “For example, the DOL fiduciary rule require[d] that a fiduciary act with the care, skill, diligence and prudence of a person who is knowledgeable about the particular issue. The New York regulation also uses the words ‘care, skill, prudence and diligence,’ as does the SEC in its proposed Regulation Best Interest for broker-dealers. I suspect that the Maryland regulators will develop a similar standard, but that remains to be seen.”