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.
