That said, long-time opponents of the rule aren’t clicking their heels with joy over the revamped rule––at least not publicly. In prepared statements, both the Securities Industry and Financial Markets Association and the Financial Services Institute, an advocacy group representing more than 100 independent advisor and broker-dealer firms, said they will spend the coming days scrutinizing the 1,028-page ruling.
Before the revised DOL rule came out, various financial industry trade groups had been threatening legal challenges to efforts to extend ERISA fiduciary protections to IRA accounts and small retirement plans. And while it’s expected that legal challenges are still likely, they might not be as frequent or ferocious.
“The securities industry will still file court challenges to this rule,” Stoltmann says. “They still don’t like it. But I can promise you that behind closed doors today SIFMA’s lobbyists are getting a high five. They dodged a bullet.
“The good news with this watered down rule is I think it’s now relatively bulletproof from a legal, or court challenge perspective,” he adds. “The DOL really did incorporate many of the changes the securities industry wanted in the rule. As such, it will be so much harder to get this thing overturned in court. And clearly that’s why the DOL did it.”
The Labor Department couldn’t be reached for comment.
Whatever happens next, it's clear the whole fiduciary debate regarding financial advice remains unfinished business, particulary when there are two agencies setting their own fiduciary agendas. "I think there are a lot of issues surrounding the lack of coordination with the SEC, and how can you simultaneously comply with SEC and ERISA rules," says Beth Dickstein, a partner at law firm Sidley Austin LLP's office in Chicago.