Raymond James Chairman & CEO Paul Reilly is very critical of states’ plans to issue their own fiduciary rules.
In a media briefing via phone following his town hall at Raymond James’ annual conference for independent advisors, Reilly explained how regulatory pressures – and state fiduciary laws in particular – are advisors biggest concerns.
“If you could imagine – and I’ll be on an extreme here – going from today’s FINRA’s standards to having a best interest in 50 states standards – which is the other extreme. You’re going to get concerned about how you’re going to operate in that kind of complex environment,” Reilly told media. “There’s a lot of concern with what’s happening [regulatory-wise] and all those changes.
Early this year, Nevada proposed fiduciary regulation and may be first state to adopt a fiduciary rule. Nevada’s proposal was hit with early criticism from Mortan Stanley and TD Ameritrade, who warned they would stop serving customers in Nevada if the state moved forward.
New Jersey followed by proposing 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.
According to Reilly, Raymond James feels that standards by state are both confusing and costly.
“Advisors have clients all over the place and if you have different standards in every state it becomes extremely difficult for advisors to serve their clients,” Reilly told media.
Reilly said that as an industry and as a firm they will be “very clear” in opposing state standards if they’re not good for clients.