State and Certain Other Fiduciary Laws
The list below includes some of the state and industry-level initiatives that would seek to impose fiduciary-like obligations on financial-services organizations, following the failed attempt by the U.S. Department of Labor (DOL) to amend ERISA's “investment advice” fiduciary rule. Our OnPoint relating to efforts by the states to adopt fiduciary-type rules may be found here, and our resource page collecting our OnPoints relating to the DOL's efforts to adopt an amended fiduciary rule may be found on Dechert's Fiduciary Rule Resource Page.
State | Name | Description |
| Nevada | An Act relating to financial planners . . . Applies to:Any broker-dealer, sales representative, investment adviser or representative of an investment adviser. | Revises the definition of “financial planner” in the state’s existing fiduciary law to include broker-dealers, sales representatives, investment advisers or representatives of an investment adviser. Existing Nevada law provides as follows: "A financial planner has the duty of a fiduciary toward a client. A financial planner shall disclose to a client, at the time advice is given, any gain the financial planner may receive, such as profit or commission, if the advice is followed. A financial planner shall make diligent inquiry of each client to ascertain initially, and keep currently informed concerning, the client’s financial circumstances and obligations and the client’s present and anticipated obligations to and goals for his or her family." Status/NotesEnacted: 383, 2018 Leg., 79th Sess. (Nev. 2017). Draft regulations released January 18, 2019 |
| Connecticut | An Act requiring administrators of certain retirement plans to disclose conflicts of interest Applies to:Any company that administers a retirement plan offered by a political subdivision of the state to the employees of such political subdivision. | Any company that administers a retirement plan offered by a political subdivision of the state must disclose the fee ratio and return, net of fees for each investment under the plan; and the fees paid to any person who, for compensation, engages in the business of providing investment advice to participants in the plan. Status/NotesEnacted. |
| New York | Suitability and Best Interests in Life Insurance and Annuity Transactions Applies to:Any insurance producer or insurer. | Sellers of insurance and annuity products in the state are required to only consider their clients' best interests when recommending life insurance and annuities. Contains exemptions for policies and contracts that fund ERISA and other plans. Status/NotesThis regulation is adopted with an effective date of Aug. 1, 2019. Final Adoption of First Amend. to N.Y. Comp. Codes R. & Regs. Tit. 11, section 224. |
| New York | Investment Transparency Act Applies to:Investment advisors currently not subject to a fiduciary standard under existing state or federal laws or regulations. "Non-fiduciary investment advisors" include, but are not limited to, individuals and institutions that identify themselves to consumers as "brokers," "dealers," "investment advisors," "financial advisors," "financial planners," "financial consultants," "retirement planners," "retirement brokers," "retirement consultants," or by any other term that is suggestive of investment, financial planning, or retirement planning knowledge or expertise. | Non-fiduciary investment advisors shall make a plain language disclosure to clients orally and in writing at the outset of the relationship that ensures that individual investors are aware of potential conflicts of interest. Such required disclosure shall state the following: "I am not a fiduciary. Therefore, I am not required to act in your best interests, and am allowed to recommend investments that may earn higher fees for me or my firm, even if those investments may not have the best combination of fees, risks, and expected returns for you." A copy of such disclosure shall be provided to the client, and a signed acknowledgment by the client that such disclosure was provided must be maintained by the non-fiduciary investment advisor. Any investment brochures, advertising materials, or other related printed information provided to clients, or any subsequent oral investment advice to them, must also include such disclosure. Investment advisors that are subject to a fiduciary duty with respect to certain types of investment advice, but not others, must disclose in plain language the extent to which the fiduciary duty does and does not apply. Status/NotesProposed in the House of Assembly but not acted upon. The Assembly is no longer in session for 2018. |
| Maryland | Financial Consumer Protection Act of 2018 Applies to:Investment advisors, broker-dealers, agents, insurance agents, investment advisers. | Would have established that specified financial professionals are fiduciaries, have a duty to act primarily in the interest of their clients, must disclose commissions and disciplinary events, and make diligent inquiries into the client's circumstances. Status/NotesA version of the bill passed without the fiduciary provisions. S.B. 1068, 2018 Leg. Reg. Sess. (Md. 2018). In January of 2019, the Maryland Financial Consumer Protection Commission issued a report recommending |
| New Jersey | An Act concerning non-fiduciary investment advisors and supplementing Title 56 of the Revised Statutes Applies to:"Non-fiduciary investment advisor" means any individual or institution that advertises or uses in self identification any term that is suggestive of investment, financial planning, or retirement planning knowledge or expertise, including, but not limited to, broker, dealer, investment advisor, financial advisor, financial planner, financial consultant, retirement planner, retirement broker, or retirement consultant. "Non-fiduciary investment advisor" shall not include investment advisors that are subject to a fiduciary duty under existing State or federal law or regulation or by applicable standards of professional conduct. | Generally the same requirements as the New York Investment Transparency Act. Status/NotesIn Committee. |
| Illinois | Investment Advisor Disclosure Act Applies to:Text of the bill is not yet written. | Text of the bill is not yet written. Status/NotesIn Committee. |
| NAIC (National Association of Insurance Commissioners) | Suitability in Annuity Transactions Model Regulation (#275) Applies to:Insurance producers and insurers. | The most recent draft of model regulation would prohibit an insurance producer or insurer from placing its financial interest above the consumer’s interest when making a recommendation of an annuity product, but would not cause any insurance producer or insurer to be treated as a fiduciary or impose a duty of loyalty. Status/NotesModel Regulation. |