Nevada’s New Fiduciary Standard
As discussed in a previous article, the Department of Labor’s Fiduciary rule, which went in to effect on June 9, could have its final applicability date pushed back beyond January 1, 2018 to allow firms more time to come up with more cost-efficient, long-term solutions. However, despite the urgings of some to delay the final applicability date, certain states are beginning to take measures to implement new regulations that will bring the guidelines of the transition period more in line with those of the full-applicability period. Heading this movement is Nevada, who, on March 20, introduced Senate Bill 383, which was signed in to law on June 2 and is set to take effect on July 1.
This bill will revise the Nevada Securities Act, and will grant the Nevada securities administrator greater authority in defining the fiduciary duty by defining certain acts as violations or exclusions from the duty. Furthermore, under this law, investors will now have the right to sue financial planners for any “economic loss and all costs of litigation and attorney’s fees” that may result from a financial planner neglecting to act as a fiduciary, or by violating the Nevada law in any way by “recommending the investment or service. ” This bill not only broadens the definition of a fiduciary, but also gives a set definition of a financial planner as someone who: “for compensation advises others upon the investment of money or upon provision for income to be needed in the future, or who holds himself or herself out as qualified to perform either of these functions.”
Nevada is making great strides in fortifying its financial law, as well as in its compliance with the DOL’s new Fiduciary Rule. Although there are still some groups that are demanding delayed full-implementation of the law, there are several other states, including New York and California, that are moving closer in the direction of Nevada and would like to receive full implementation sooner rather than later.
For further information on this law, go to: http://scholarfp.blogspot.com/2017/06/most-nevada-financial-planners-become.html