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Massachusetts said Friday it had adopted a fiduciary rule requiring brokers to act in clients’ best interests. That makes it the first state in the nation to impose such a regulation since a court struck down a federal fiduciary rule for retirement accounts two years ago,

(**quick note on the never ending fiduciary rule debate. It’s kind of like attempting to legislate morality – in other words the law of unintended consequences uniquely applies.)

The final rule is coming under attack from financial industry trade group the American Securities Association, InvestmentNews reports. That’s no surprise, as industry groups have for some time opposed state efforts to raise broker standards of conduct, saying they will create a regulatory patchwork that will be difficult and expensive for firms to comply with. (Nevada and New Jersey are also working on fiduciary rules.) The brokerage industry groups wants the SEC’s Regulation Best Interest, which falls short of establishing a true fiduciary standard, to be the sole rule governing broker advice, the publication notes.

But investor advocates, who had praised an earlier version of Massachusetts’ rule as raising the bar higher than the SEC’s standard, also are expressing dissatisfaction, saying the state made too many changes to the rule in the face of industry criticism.

Among those changes, according to InvestmentNews: The rule won’t apply to insurance product sales. Nor will it impose an ongoing fiduciary duty on brokers unless account monitoring is specified in a customer contract.

“What’s left is a modest improvement on Regulation Best Interest but not the kind of tough standard needed to protect investors from conflicted advice,” said Barbara Roper, director of investor protection at the Consumer Federation of America, is quoted saying. “Backing down on ongoing [fiduciary] duty is particularly disappointing.”

The Massachusetts rule, which was proposed by William Galvin, the state’s secretary of the commonwealth, takes effect March 6.

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