Washington, D.C. partner Brad Campbell was quoted in a Wealth Management article titled “The Coming Legal Challenge to State Fiduciary Standards.” The piece took a look at whether or not Reg BI trumps state laws as it relates to fiduciary standards.
According to Brad, states have the ability to enact regulations, provided the resulting changes in record keeping rules do not exceed what’s demanded of brokers by the 1934 Exchange Act. “If the complaint is that states do not have enough latitude to run with their own policies, that was the point of the law, to establish a uniform standard,” he said. “It doesn’t mean there can be no change; it just means they can’t go beyond what’s stated by federal law.”
In the piece, Brad asserted that litigation is all but inevitable, agreeing that particular aspects of the preemption question have not been challenged in court. Additionally, he noted that states have been more proactive in enacting their own measures since the 5th U.S. Circuit Court of Appeals overturned the Department of Labor’s 2016 fiduciary rule last year.