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FSI Looks to Kill Maryland Fiduciary Advisor Law
Financial Advisor; February 22, 2018
A sweeping fiduciary provision that would require Maryland investment advisors, brokers and insurance agents to act in clients’ best interest appears to have been successfully sidetracked for now by the bill's opponents, including the Financial Services Institute (FSI).
The Maryland House of Delegates removed the fiduciary provision from legislation earlier this month. Now FSI said it is turning its attention to killing an identical provision in the Maryland Senate, where lawmakers on the Senate Finance Committee on Thursday debated the bill, called the Financial Consumer Protection Act of 2018.
“We thank the Maryland House of [Delegates] for addressing our concerns and removing the fiduciary provision from its version of the Financial Consumer Protection Act of 2018, but our concerns still remain regarding the Maryland Senate’s version of the bill,” FSI EVP and General Counsel David Bellaire, told Financial Advisor in a statement.
Bellaire said that “FSI has long supported a federal uniform fiduciary standard of care for all retail financial advice. However, individual state legislation on this issue will lead to duplicative regulation, investor confusion, legal conflicts and compliance challenges without providing additional investor protection benefits.”
Fiduciary conduct is good for business
InvestmentNews; February 21, 2018 @ 2:25 pm
Investment advisers have been conditioned to think of fiduciary conduct as a compliance matter. The long-debated DOL fiduciary rule, the impending SEC fiduciary rule, Finra's recent "best interest" spin on suitability, and new fiduciary laws introduced by states all fix attention on mandated behaviors based upon fiduciary obligations.
The focus on compliance obscures the compelling business case that fiduciary conduct (1) is what clients want, (2) is operationally efficient and reliable, (3) strengthens client-adviser relationships and makes them more enduring, (4) provides the adviser with greater pricing power, and (5) enhances the advisory firm's brand and market valuation.
Clients want trustworthy advice. Common sense tells us that for matters of great importance in areas beyond our personal expertise, we want the advice of professionals who are competent, ethical and worthy of our trust. Research bears this out. In 2017, the CFA Institute conducted a survey of 4,000 private investors and published its findings in The Value of Premium Wealth Management for Investors.
The top four "essential adviser qualities" sought by wealthy investors are: professionalism, integrity, clear communication and financial acumen. While clients may not articulate that they want a fiduciary adviser, the qualities they seek are those of a fiduciary.