New York

George Michael Gerstein on podcast to discuss fiduciary-related regulatory developments

The implications for broker-dealers and investment advisers as Massachusetts and New Jersey gallop toward uniform standard of care

New York’s Department of Financial Services reportedly planning to investigate sales of annuities in the 403(b) retirement plan marketplace

Bill Mandia discusses New York’s new best interest and its effect on the sale of annuities

Fiduciary Governance Group member Bill Mandia recently spoke with Fund Intelligence regarding the market’s response to the New York Department of Financial Services’ ‘Best Interest’ regulation. It was reported that 8 firms have suspended the sale of fee-based annuities in New York until there is further guidance from the regulator. Bill noted, in part, that the new rules present numerous compliance challenges and sets a new (high) bar.

Why states have opted to “Go Your Own Way” on fiduciary standards re. broker-dealers and investment advisers

Over the past 2 years, the states have taken disparate approaches to filling what they perceive as a regulatory void when the DOL Fiduciary Rule was struck down by a federal court. At the outset, most states, with the exception of Nevada, took a disclosure-based approach (most notably, NY and NJ), and legislation was the preferred avenue. Now, the trend is toward heightening the standard of care (disclosure appears to be viewed skeptically) through regulation (executive/governor’s branch). Though it varies by state, there at times can be incongruity of approach taken within a state. For example, the New Jersey legislation favored disclosure, whereas Governor Murphy preferred a new standard of care. Though the New Jersey legislation is unlikely to be reintroduced next year, it highlights a risk for market participants when there is inconsistency intrastate and interstate. We are expecting to see draft bills over the coming months for the next session in a small handful of states, but will also keep a (very) close eye on if and when either or both of New Jersey and Massachusetts decide to move forward with their fiduciary duty regulations applicable to broker-dealers and investment advisers. Nevada is also likely to be moving forward with finalization on its proposed fiduciary implementing regulation.