As expected, a slew of financial industry groups — including the Securities Industry and Financial Markets Association and the U.S. Chamber of Commerce — filed a lawsuit to stop the rule earlier this month. Despite major changes to the DOL's reworked proposal, the claimants contend the rule remains a byzantine structure that will force new obligations and high costs on advisors to corporate 401(k) plans and individual retirement accounts.
"American families are losing billions of dollars because of an out-of-balance system," said Labor Secretary Thomas Perez. "With the finalization of this rule, we are putting in place a fundamental principle of consumer protection in the retirement landscape."
The rule will take effect in stages beginning in April 2017, Perez said.
"There were some helpful changes regarding the disclosure requirements, but the rule as a whole still has major deficiencies," said Alice Joe, managing director of the Chamber of Commerce's Center for Capital Markets Competitiveness.
Joe said the rule is particularly hard on small businesses that want to set up an employee retirement plan, and she argues that the DOL did not adequately address industry concerns with the rule. It will force advisors to act in the best interests of their clients. "We believe in a 'best interests' standard, but we disagree with the manner in which the DOL implemented the rule," said Joe.