Investment advisers and brokers will soon be faced with new federal disclosure and compliance requirements, but the changes disappointed consumer advocates and suggest more state regulatory action on fiduciary rules is likely, Financial Planning magazine reported. 

The U.S. Securities and Exchange Commission on Wednesday approved on a 3-1 vote a rule package that includes Regulation Best Interest, which will set a standard of conduct for brokers and advisers. The regulations, SEC Chairman Jay Clayton said, fulfill two objectives by bringing standards of conduct in line with reasonable investor expectations and preserving investor access to products and services. 

SEC Commissioner Robert Jackson Jr. cast the dissenting vote, saying the rules “retain a muddled standard that exposes millions of Americans to the costs of conflicted advice.” 

Iowa Insurance Commissioner Doug Ommen, who is also the state’s securities regulator, said the National Association of Insurance Commissioners has been working toward a harmonized best interest standard that raises the standard of conduct. The Iowa Insurance Division last week proposed changes to the NAIC model standard.

“While the SEC has not articulated in the actual text of its Regulation Best Interest rule an incorporation of all suitability foundations, we firmly believe that the actual text of the NAIC model regulation for annuity transactions should draw on the processes associated with suitability to shape the higher ‘best interest’ professional standard,” Ommen said in a statement.