Stringer’s proposal would have all advisers operating under the suitability standard at the outset of any financial relationship, and would have them submit the following language to all clients upon the founding of a new advisory relationship: “I am not a fiduciary. Therefore, I am not required to act in your best interests, and am allowed to recommend investments that may earn higher fees for me or my firm, even if those investments may not have the best combination of fees, risks, and expected returns for you.”

Not surprisingly, the proposal has its friends and its foes. Knut A. Rostad, president of the Institute for the Fiduciary Standard, believes it is positive. “I think what they’re doing is excellent and could be very beneficial if it gets through in a fairly clean-cut way,” he tells PLANADVISER. The language of the statement is simple, direct and understandable, and he says he hasn’t heard any objections that have much bearing, in his opinion.

“We think it’s misguided,” says Nancy Lancia, managing director of the Securities and Financial Markets Association (SIFMA). While it’s difficult to accurately assess the bill without reading the forthcoming language, Lancia wonders if a one-off proposal could lead to investor confusion.

Investor mobility—people frequently move from state to state—underscores the need for a national standard over city and state solutions, she suggests. “I’ve heard a lot of concern from members about what this would mean,” Lancia tells PLANADVISER. “We should try to make it as straightforward and easy to understand as possible.”

Work and discussion at the federal level should get everyone’s attention, Lancia says. “SIFMA has long supported a federal uniform fiduciary standard and believes that SEC action is the appropriate course,” she comments. “A lot more weighing in and evaluating needs to be done first.”

Stringer also released a report that details his proposal, gives a history of the fiduciary standard and supports a nationwide fiduciary standard. The report comes on the heels of two actions at the federal level: first, President Barack Obama’s recent call for the Department of Labor (DOL) to strengthen fiduciary standards for all advisers, and second, Securities and Exchange Commission (SEC) Chairwoman Mary Jo White’s views on the need for a uniform standard.

The lack of a fiduciary standard costs investors billions, Stringer says, citing a recent report by Obama’s Council of Economic Advisers that calculated the cost of high fees, conflicts of interest and poor investment practices at as much as $17 billion annually, and that conflicted advice can eat up to 1% of investment returns.

“We need a uniform, national fiduciary standard, but we can’t wait to give New Yorkers the common sense reforms they need to make informed investment choices,” Stringer says. “This new law will ensure that New Yorkers know whether the investment advice they receive is in their best interest.”

The wording set out in the proposal will ensure transparency and accountability in relationships between investors and their advisers, Stringer comments, and provide needed protections to millions of New Yorkers. “Hard-working New Yorkers should not be penalized by a system that doesn’t adequately address potential conflicts of interests and financial mismanagement,” he says.