A Texas judge has upheld the Department of Labor's fiduciary rule, dealing a serious setback to its opponents.

On Wednesday, the DOL attempted to delay the enforcement of the rule, following an order signed Friday by President Trump asking the department to review the rule.

U.S. District Judge Barbara M.G. Lynn in the Northern District of Texas, Dallas, denied the DOL’s request.

As a result, the fiduciary rule, which would hold advisors making investment recommendations within retirement accounts to more stringent best-interest standards, is set to be enforced on April 10.
 
Lynn’s ruling rejects a complaint filed June 1, 2016, by SIFMA, the U.S. Chamber of Commerce, and advisor groups challenging the DOL’s authority to regulate advice given within retirement accounts.

In her decision, Lynn found that the cost-benefit analysis of the rule used by the DOL during the administration of President Obama was reasonable.

Lynn also said that opponents' arguments that the rule’s best-interest contract exemption requirements were onerous fall flat when many firms, including Merrill Lynch, Mass  Mutual, Ameriprise and Raymond James have already stated that they intend to conform to the rule.

Micah Hauptman, financial services counsel at the Consumer Federation of America, lauded Lynn’s ruling.

"The judge's opinion demolishes all of the arguments that the industry litigants have made against this rule. It's clear that the DOL did a rigorous economic analysis that proved the need for the rule. The decision also exposes all the industry's sky-is-falling claims as having no merit," Hauptman said.

The decision sets back efforts to delay or overturn the rule, as the Texas court was viewed by opponents as one of the most advantageous venues for their litigation. After rulings in Kansas and Washington upheld the regulation, only one major legal challenge to the rule, in Minnesota, remains outstanding.

The plaintiffs in the Texas case, opponents of the rule, vowed to fight on in a joint statement released Wednesday evening:

“We continue to believe that the Department of Labor exceeded its authority, and we will pursue all of our available options to see that this rule is rescinded.  While we have long supported a best interest standard, this is a misguided rule that will harm retirement savers and financial services firms that provide needed assistance and options to their clients, including modest savers and small business employees. The President’s recent directive to the Department, reflecting well-founded, ongoing and significant concerns about the rule, is a welcome development.”