Financial advisors and fund firms should presume the new Department of Labor fiduciary regulations will be enacted, despite recent lawsuits filed against the new rules, said the head of a top mutual fund firm.

“They have an uphill climb with the court case. … [The lawsuits] will play out and take time. We will march ahead and assume the rule will be as written,” William McNabb, chairman and chief executive officer of Vanguard, said at the Morningstar Investment Conference on Wednesday.

Nine organizations, including the U.S. Chamber of Commerce and the Financial Services Institute (FSI), filed a suit in early June in U.S. District Court for the Northern District of Texas against the DOL rule that requires advisors to act as fiduciaries when advising on retirement accounts.

McNabb’s general advice to other fund firms is to prepare as though the rule will go through as planned.

McNabb said Vanguard’s view is the DOL rule “ended up as well as could be expected,” admitting that’s not a popular sentiment.

“We think the final version is not perfect, but workable. Net-net it will be a positive for the industry in the long run,” he said, adding that when the rule was first proposed, Vanguard was initially concerned about the impact on small investors.

As a result of the rule, Vanguard will treat its 401(k) clients as it usually does, with a few tweaks, McNabb said, without elaborating. The company will have to adjust some documents relating to IRA rollovers to comply with the rules, but they are expected to be ready by the deadline, he said.

McNabb also spoke about the proliferation of exchange-traded funds and smart beta strategies.

Last year ETF issuance hit a record, and McNabb said new product launches have gotten out of hand.

“It reminds me of the late ‘80s and ‘90s, where a new mutual fund was created every few hours,” he said. “I worry about [the] new ideas out there. … Some of these strategies are not an investment strategy.”

McNabb said Vanguard doesn’t consider smart beta to be a better way to index, whether a fund is using fundamental or factor theories, calling them “a mechanical way to take an active bet.”

Smart beta strategies can be a useful tool if someone wanted to express a few views on the market, but said they have limitations, he said.

“Growth is overpriced now, so maybe a fund will want to tilt to value. There is some validity to that, but you need to recognize you’re taking a bet against the market,” he said.