Stay calm, stay in the know - This could affect your E&O, but we can help.

 

 

 

 

Today Investment News released an article saying.. 

       Well, take a look.

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New Jersey releases rule to impose fiduciary duty on brokers. 

Apr 15, 2019 : By Mark Schoeff Jr, Investment News

New Jersey brokers would have to meet a higher investment advice standard under a rule proposed Monday.

The measure would impose fiduciary duty on brokers, subjecting them to a higher requirement than the current suitability standard they must meet. The regulation also would codify fiduciary duty for investment advisers, who already must adhere to it.

A broker who fails to act as a fiduciary would be engaging in an "unethical or dishonest business practice," the proposal states.

Last fall, the state solicited comments on a pre-proposal. Many of those who responded urged the state to wait for the Securities and Exchange Commission to issue its own advice reform final rule, the centerpiece of which is Regulation Best Interest, to raise the broker standard.

The SEC is expected to act this summer.

But New Jersey signaled Monday that it has decided to proceed....

You can see the full article here.

 

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  Before anyone get's too excited...

let's remember that we've seen this before.  

 

As the article itself alluded to, this isn't the first time our industry has confronted this bright idea. As early as 2010 & 2013 we saw proposals to hold brokers to a higher suitability standard, ultimately adding more overhead for brokers and hoops to jump through. In 2017 it was officially proposed and we in the E&O industry started feverishly making adjustments to account for the new load of government issued red-tape. We beefed up our Defender Max E&O Program to ensure that our clients would be protected against the many new pitfalls and perils the new regulation put forward. And then, nothing...

   "November 29, 2017, the U.S. Department of Labor (DOL) officially extended the transition period for certain portions of the “Fiduciary” rule under the Employee Retirement Income Security Act of 1974, as amended, by 18 months, until July 1, 2019" - https://www.pillsburylaw.com/en/news-and-insights/dol-again-delays-implementation-of-erisa-fiduciary-rule.html

The policy got put on hold, delayed until this year. With the delay coming to an end just a few months from now, of course the subject is surfacing again. New Jersey seems to be biting at the bit to get this over with, but regardless of where you live, rest assured that we're not being taken by surprise here - (or at least we're not). We'll stay on-top of the DOL's proceedings in the upcoming months and continue to inform and advise you on how this affects your E&O coverage. However, with changes already put in place throughout our key policies, it's safe to say...


We've got you covered.     

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