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April 15, 2019 at 05:51 PM
As expected, New Jersey has proposed its own fiduciary rule that requires all investment professionals registered with the state’s Bureau of Securities to place the interests of their clients above their own when recommending securities or providing investment advice.
The proposed rule, covers broker-dealers, agents and advisors but excludes advisors who already act as fiduciaries to ERISA-covered retirement funds, unlike Nevada’s proposed rule.
(Related: Nevada’s ‘Expansive’ Fiduciary Plan Shocks BDs, RIAs)
“If the federal government won’t act to to protect investors, then we will,” said New Jersey Attorney General Gurbir Grewall in a statement referring to the federal government’s abandonment of the Labor Department’s fiduciary rule in favor of a best interest contract, which is still pending at the SEC. “The rule we’re proposing will provide important safeguards for New Jersey families when they invest, save, and plan for the future.”
Under the proposal, all investment registered financial services professionals are required to act in accordance with their fiduciary duty when providing investment advice or recommending an investment strategy, the opening or transfer of assets to any type of account, the purchase, sale or exchange of any security, according to the press release from the New Jersey Bureau of Securities. Failing to do so would constitute “dishonest and unethical practice,” according to the proposal.
