Fiduciary/Best Interest Development
- New state law effective July 1, 2017, amended NRS 628A.010 and NRS 90.575.
- Provides that a financial planner “has the duty of a fiduciary toward a ” The term “financial planner” means a person who, for compensation, advises others on the investment of money or on provision for income to be needed in the future, or who holds himself or herself out as qualified to perform either of these functions.
- The law also imposes a fiduciary duty on broker-dealers, sales representatives and investment advisers who, for compensation, advise other persons concerning the investment of The law does not apply to sales of insurance, unless accompanied by investment advice.
- The law does not include a definition of fiduciary duty but does provide for a private right of action.
- Implementation of the law is dependent on the adoption of On January 18, 2019, Nevada released draft regulations. Although the regulations have not yet been finalized, in early 2022 Nevada’s Securities Administrator indicated that she intends to resume work on the state’s proposed regulations in early 2022, with the aim of finalizing the regulations by November 2022.
- In general, the draft regulations describe the substantive duties investment advisors and broker-dealers owe their clients, and what actions constitute a breach of their fiduciary duties, as well as certain exceptions to these regulations.
- The comment period ended on March 1, 2019.
- On July 8, 2022, the Nevada Commissioner of Insurance issued a proposed regulation (NAC 688A.460) regarding the training to be provided by an insurer before a producer is permitted to sell an annuity for the insurer. The proposed regulation (1) establishes new requirements for training producers; (2) revises procedures for the review of recommendations and monitoring of compliance to ensure there is a reasonable basis to determine that the recommendation furthers the insurance needs and financial objectives of the consumer, including oversight of required functions which are contracted out to third parties; and (3) requires annual reporting to senior management of insurers.
Sources
Senate Bill No. 383
September 8, 2017 Notice of Regulation
October 2, 2017 Notice of Regulation
January 18, 2019 Draft Fiduciary Duty Regulations
Notice of Workshop to Solicit Comments on Proposed Regulations