Lawsuit challenging DOL fiduciary rule to be filed Thursday: source

Lawsuit challenging DOL fiduciary rule to be filed Thursday: source
U.S. Chamber of Commerce, SIFMA, FSI, IRI and the Financial Services Roundtable are lining up against the controversial rule. The suit may be filed as early as Thursday.
MAY 24, 2016
Several financial advice industry groups, along with the U.S. Chamber of Commerce, are ready to go to court to challenge the highly disputed fiduciary rule finalized in April by the Department of Labor, according to a source close to the matter. Four groups will join the Chamber of Commerce in the court action: the Securities Industry and Financial Markets Association, the Financial Services Institute, the Financial Services Roundtable and the Insured Retirement Institute, according to the source who did not want to be identified. The lawsuit will be filed Thursday, the source said. Some of the details of the impending suit were first reported by the Wall Street Journal Tuesday night. The suit is thought to focus on the provision that leaves advisers giving retirement advice vulnerable to class-action lawsuits if investors think their adviser has not acted in their best interests, according to the Journal. Other parts of the rule that could be challenged, according to the InvestmentNews source, include the Labor Department's authority to promulgate the rule and whether the regulation will deny low- and moderate-income investors access to advice. The lawsuit comes on the heels of resolutions approved in both chambers of Congress to stop the regulation. Those votes were seen primarily as symbolic because President Barack Obama has vowed to veto the resolutions, and the sponsors don't have enough votes to override his veto. (Related read: The DOL Fiduciary rule from all angles) On Tuesday, Erica Flint, a spokeswoman for the chamber, declined to comment. A SIFMA spokeswoman did not respond to a request for comment. The other groups behind the lawsuit either declined to comment or have yet to respond. Another group that is exploring a lawsuit, the American Council of Life Insurers, has not yet made a decision. (Related read: Frequently asked questions about the DOL fiduciary rule) “In response to a decision by the ACLI Board of Directors, we continue to explore a federal court challenge to the fiduciary regulation,” ACLI spokesman Jack Dolan said in a statement Tuesday. “Our strategic decisions will be made based on further direction given by our member companies.” The Labor Department has said it expected legal challenges over the rule and is confident it will prevail in court.

Latest News

Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households
Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households

Pew survey reveals slight majority consensus on tax rates, but views splinter based on political alignment and income levels.

The Fed's going to cut rates
The Fed's going to cut rates

While the Federal Reserve's decision to hold interest rates steady in March was widely expected, it's the reactions from financial professionals that provide a more nuanced picture of the central bank's approach.

Ontario Pension Fund revamps PE business in light of global risk
Ontario Pension Fund revamps PE business in light of global risk

The pioneering member of Canada's Maple Eight is stepping back from its go-it-alone private equity approach as a drought in deals and Trump's trade war prompt a rethink.

Raymond James, RBC reel in UBS advisors managing over $690M in assets
Raymond James, RBC reel in UBS advisors managing over $690M in assets

The firms' latest additions in Florida and Nevada come as a strategic change at UBS raises risk of advisor defections.

Assetmark debuts new advisor succession planning program
Assetmark debuts new advisor succession planning program

The new program offers opportunities and events structured for rookies, next-gen advisor leaders, and soon-to-exit veterans.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies