In 2018, the Fifth Circuit vacated the Department of Labor’s 2016 Fiduciary Rule, which required certain broker-dealers and investment advisers providing investment advice subject to ERISA to act in consumers’ best interests, as opposed to their own. DOL has indicated it will be proposing a new rule. But in the meantime, states have adopted and enforced their own such rules. On Friday, the Massachusetts Supreme Judicial Court rejected Robinhood Financial’s challenge to that state’s rule, finding that it did not exceed statutory authority, does not override common-law protections available to investors, that there was no state non-delegation problem, and that the SEC’s “best interest” standard for broker-dealers did not preempt the law.
