ADISA Submits Comment Letter to Massachusetts Securities Division Regarding Proposed Regulations

Jul 31, 2019

ADISA submitted a letter Friday, July 26, to the Office of the Secretary of the Commonwealth, Massachusetts Securities Division, regarding its proposed regulation “to apply a fiduciary conduct standard on broker-dealers, agendts, investment advisers (“IAs”), and investment adviser representatives when dealing with their customers and clients.”
ADISA agrees with the need to set appropriate standards around advice provided by all financial professionals, whether episodic or continuous in nature. However, ADISA’s comment letter urges the Division to consider the following:

  1. Alternatives are distinct from their publicly-traded counterparts in many respects, including cost and liquidity.
  2. Alternative investments play a crucial role in small-balance, retail portfolios.
  3. Alternatives include many important non-public products.
  4. A broad, “one-size fits all” fiduciary duty is incompatible with alternatives.
  5. Regulation Best Interest adds investor protections.
  6. A “Best Of” standard is only theoretical.
  7. On ongoing monitoring requirement limits consumer choice.
Signed by ADISA President Greg Mausz, Preferred Capital Securities, the letter was drafted by John Grady, DLA Piper; Catherine Bowman, The Bowman Law Firm; Thomas Rosenfield, HillStaffer; and John Harrison, ADISA. You can read the letter in its entirety here.