Mona Amin | January 9th, 2017
Preparing for DOL’s Fiduciary Rule

Many in the financial services sector are awaiting the January 20, 2017 ascendancy of a new presidential administration. Some in the sector are anticipatory, other are all but ecstatic, but all financial operators innately understand that a slew of changes could be on the horizon.
There is another looming date, however, that some in the sector, particularly investment advisors, are dreading. And that dread will magnify unless the new administration takes up the cry of a chorus of advocates and acts quickly to intervene and squelch the April debut of the “fiduciary rule.â€
The Department of Labor™’s new fiduciary rule will, explained simply, require financial advisors to act in the best interest of their clients. In other words, they will have to act as a true, defined “fiduciary†when recommending investment products to those who seek their advice and counsel.
Currently, investment advisors are asked to follow a “suitability†standard, which binds advisors to developing investment strategies that meet the “objectives†and “means†of their investors. The new fiduciary rule will impose a heightened standard for investor protection on advisors, and will place an added legal responsibility on investment advisors by requiring them to act in their client™’s best interest at all times, while avoiding conflicts that generally arise when advisors receive commissions. Not only will this new rule fundamentally change how the retirement planning and investment industry operates by imposing hefty fines on violators, it will also increase a company™’s chance of entering into litigation if advisors cannot prove that they prioritized the client™’s interest over their own, or those of the investment vehicles they have recommended.
The rule has already had a major impact on the retirement planning sector, with advisors taking on increased legal obligations and additional expenditures to ensure their own compliance. Across the country, investment advisory companies and financial service organizations are partnering to halt the application of the rule, at least until the new Administration has time to determine whether to dismantle the lawfully, or in part.
In Texas, for example, the U.S. Chamber of Commerce has joined with several financial organizations, including the Financial Services Institute and the Financial Services Roundtable, in a suit alleging that the Labor Department exceeded its authority in creating the rule. The complaint filed in June 2016 claims that “The Department bootstrapped its way into regulating matters outside its jurisdiction by first defining the term ‘fiduciary’ in an impermissibly broad manner, and then exploiting its exemptive authority to obligate financial services professionals to accept special duties and liabilities that have no basis in ERISA and the Code.â€[1] The Chamber and its partners are seeking an injunction to halt enforcement of the rule.
Elsewhere across the country, two district courts have already denied motions to halt the enforcement of the rule, and two more have yet to decide.
The new Republican-led Congress has indicated a desire to overturn the fiduciary rule, as have some of the President-elect™’s advisors. Financial advisors should wait, however, to pop the champagne and celebrate the death of this rule because it may not happen anytime soon, given the administration™’s other stated priorities for its first 100 days of operation.
In the meantime, we can likely expect affected companies to continue filing litigation against the government until the new administration figures out its position on the issue.
As the financial industry prepares for the rule to go into effect, companies and organizations looking to exert pressure on the new administration and Congress to speed up a review of the fiduciary rule should develop a well-thought-out communications and public affairs strategy. If the company is currently in litigation over the matter, its communications strategy should complement its legal strategy. Lastly – and this is one point that is often overlooked – companies publicly attacking the rule should consider the long-term effects of their opposition to a rule that requires financial advisors to act “in the best interest of their clients,†and what the optics of a negative position suggests to those clients, who may find the company™’s position disingenuous and unsavory.
Mona Amin | January 9th, 2017
Preparing for DOL’s Fiduciary Rule

Many in the financial services sector are awaiting the January 20, 2017 ascendancy of a new presidential administration. Some in the sector are anticipatory, other are all but ecstatic, but all financial operators innately understand that a slew of changes could be on the horizon.
There is another looming date, however, that some in the sector, particularly investment advisors, are dreading. And that dread will magnify unless the new administration takes up the cry of a chorus of advocates and acts quickly to intervene and squelch the April debut of the “fiduciary rule.â€
The Department of Labor™’s new fiduciary rule will, explained simply, require financial advisors to act in the best interest of their clients. In other words, they will have to act as a true, defined “fiduciary†when recommending investment products to those who seek their advice and counsel.
Currently, investment advisors are asked to follow a “suitability†standard, which binds advisors to developing investment strategies that meet the “objectives†and “means†of their investors. The new fiduciary rule will impose a heightened standard for investor protection on advisors, and will place an added legal responsibility on investment advisors by requiring them to act in their client™’s best interest at all times, while avoiding conflicts that generally arise when advisors receive commissions. Not only will this new rule fundamentally change how the retirement planning and investment industry operates by imposing hefty fines on violators, it will also increase a company™’s chance of entering into litigation if advisors cannot prove that they prioritized the client™’s interest over their own, or those of the investment vehicles they have recommended.
The rule has already had a major impact on the retirement planning sector, with advisors taking on increased legal obligations and additional expenditures to ensure their own compliance. Across the country, investment advisory companies and financial service organizations are partnering to halt the application of the rule, at least until the new Administration has time to determine whether to dismantle the lawfully, or in part.
In Texas, for example, the U.S. Chamber of Commerce has joined with several financial organizations, including the Financial Services Institute and the Financial Services Roundtable, in a suit alleging that the Labor Department exceeded its authority in creating the rule. The complaint filed in June 2016 claims that “The Department bootstrapped its way into regulating matters outside its jurisdiction by first defining the term ‘fiduciary’ in an impermissibly broad manner, and then exploiting its exemptive authority to obligate financial services professionals to accept special duties and liabilities that have no basis in ERISA and the Code.â€[1] The Chamber and its partners are seeking an injunction to halt enforcement of the rule.
Elsewhere across the country, two district courts have already denied motions to halt the enforcement of the rule, and two more have yet to decide.
The new Republican-led Congress has indicated a desire to overturn the fiduciary rule, as have some of the President-elect™’s advisors. Financial advisors should wait, however, to pop the champagne and celebrate the death of this rule because it may not happen anytime soon, given the administration™’s other stated priorities for its first 100 days of operation.
In the meantime, we can likely expect affected companies to continue filing litigation against the government until the new administration figures out its position on the issue.
As the financial industry prepares for the rule to go into effect, companies and organizations looking to exert pressure on the new administration and Congress to speed up a review of the fiduciary rule should develop a well-thought-out communications and public affairs strategy. If the company is currently in litigation over the matter, its communications strategy should complement its legal strategy. Lastly – and this is one point that is often overlooked – companies publicly attacking the rule should consider the long-term effects of their opposition to a rule that requires financial advisors to act “in the best interest of their clients,†and what the optics of a negative position suggests to those clients, who may find the company™’s position disingenuous and unsavory.
- Brand
- The Fifth Estate: A Business Guide for Surviving “The Troubles”
- Here We Come
- Corporate Revolt Over Campaign Donations Shakes Political World
- What Happens Next?
- CSR & Sustainability
- Public Perception & the Biden Transition
- WATCH: Reputation Management with PRSA
- Over the River and Through The Woods
- Why Non-Profits are so Vulnerable to Crisis Risk
- The Threat to Free Markets
- What Happens When Nonprofits Get Caught In The Klieg Lights?
- You Took a PPP Loan. Now Get Ready to Talk About It.
- Communications
- The Fifth Estate: A Business Guide for Surviving “The Troubles”
- Here We Come
- The Ministry of Common Sense
- Why Should I Apologize? Lawyers vs. Communicators
- What Happens Next?
- CSR & Sustainability
- A Conversation with Abbe Lowell
- A New Year’s Resolution
- Public Perception & the Biden Transition
- WATCH: Reputation Management with PRSA
- Leveraging Legal Expertise in Communications
- Over the River and Through The Woods
- Company News
- Here We Come
- Recent Awards & Recognition
- Won’t You Be My Neighbor?
- What’s a Director to Do?
- LEVICK Announces Partnership with BCG
- A New Look
- Albert Krieger, 1923-2020
- LEVICK Announces Partnership with Jipyong
- Speaking to In-House Counsel
- Childhood Lessons
- LEVICK Announces New Webinar Series with Turbine Labs
- LEVICK Launches New Website
- Crisis
- The Fifth Estate: A Business Guide for Surviving “The Troubles”
- What to expect as the clock approaches midnight
- How to Stop the Madness
- Corporate Revolt Over Campaign Donations Shakes Political World
- A Remembrance of Tommy Raskin
- No ‘justice’ in rep’s vote
- A Call for Orderly & Peaceful Transition of Power
- Recovering from the Greatest Sacrifice
- The Cost of Government Regulation and the Threat to Free Enterprise
- What Happens Next?
- A Conversation with Abbe Lowell
- Covid-19: The Pandemic that Never Should Have Happened
- Finance
- Here We Come
- The Threat to Free Markets
- Advisory & Insurance Services
- WATCH: Revolutionizing Litigation Finance
- Litigation Finance: Revolutionizing Litigation
- Consumer-Focused Solutions for Financial Health
- Event: Consumer-Focused Solutions for Financial Health
- Sports: Power and Money in a New Age of Social Justice
- The Balancing Act: The Role of Whistleblowers in American Commerce and Government
- The Evolving and More Powerful FARA
- FCPA & Compliance in a Time of Uncertainty
- Shareholders vs. Stakeholders: Is the Paradigm Shifting?
- Guest Column
- Guest Blog: The Mainstream Media Gets an A for Intellectual Arrogance, an F for Journalism
- Buckle up Directors: Cybersecurity Risk and Bankruptcy Risk Are Not Mutually Exclusive
- Buckle up Directors: Cybersecurity Risk and Bankruptcy Risk Are Not Mutually Exclusive
- South Africa: The Slow Decline of the ANC
- Why CSR Fails and How to Fix It
- What to Expect Following the European Elections?
- Buhari Inaugurated. What Now for Nigeria?
- Marketing- It’s Up To You…
- Crisis Management lessons from the air-crash investigation model
- The Future of War
- Health
- Food Issues & the Biden Administration
- Covid-19: The Pandemic that Never Should Have Happened
- Pharma’s Post-Pandemic Policy Outlook
- Keeping Hope Alive
- Real Herd Immunity
- The Fiction of College Sports Amateurism
- Mac Summit: Crisis Communications in a Post-Covid, Post-Election World
- Travel Industry Communications in the Age of Covid-19
- Track of Time
- Is C-19 Taking Women Lawyers’ Careers Back to the 1950s?
- Post-Pandemic PR Strategy
- Bankruptcy: A Culture of Transparency
- In Memoriam
- Snider’s Super Foods: Locally World Famous
- Speak Truth With Love, Not Anger
- In Memoriam: Stephen Susman
- Letter to the Movement
- John Lewis’ Life Bridged the Best of America
- Albert Krieger, 1923-2020
- In Memoriam of Marcia Horowitz
- Jim Lehrer Passes Away
- Martin Luther King, Jr.
- Harold Burson Passes Away
- Interviews
- CommPRO: Ruth Bader Ginsberg’s Life & Legacy
- Richard Levick on “My Wakeup Call”
- Primerus Webinar: Into the Wind
- The Future of Baseball Post-Pandemic
- Webinar: The End of Brand Neutrality
- Thought Leadership & Organic Growth
- Man & Superman
- LEVICK Announces New Webinar Series with Turbine Labs
- Navigating Coronavirus Challenges in the Insurance Industry
- VIDEO: How to Anticipate & Avoid a Crisis
- What’s Next? with Julie Chase
- What’s Next?: California Electoral Behavior
- Law Firms
- Why Should I Apologize? Lawyers vs. Communicators
- You Took a PPP Loan. Now Get Ready to Talk About It.
- Beyond Black Swan: Positioning the law firm for the new normal
- A Salute to Personal Courage and the Rule of Law
- Cyber Risk Institute Expands Its Profile
- When a client becomes a law firm’s PR nightmare
- The General Counsel’s Dilemma
- A First Look at the Google Antitrust Suit
- The Latest Top Class Actions
- Trust on Trial: How Communicators Succeed in a World No Longer Trusted
- The Latest Settlements, Class actions, Investigations & More
- Managing Legal & Communication Advice in a Crisis
- Litigation
- Why Should I Apologize? Lawyers vs. Communicators
- A Conversation with Abbe Lowell
- Leveraging Legal Expertise in Communications
- You Took a PPP Loan. Now Get Ready to Talk About It.
- Beyond Black Swan: Positioning the law firm for the new normal
- A Salute to Personal Courage and the Rule of Law
- Cyber Risk Institute Expands Its Profile
- When a client becomes a law firm’s PR nightmare
- The General Counsel’s Dilemma
- WATCH: Revolutionizing Litigation Finance
- Litigation Finance: Revolutionizing Litigation
- A First Look at the Google Antitrust Suit
- Our Work
- Recent Awards & Recognition
- The Cyber Bad Guys Are Getting Worse
- Crisis Communications & The Age of Cancel Culture
- Standing on the Shoulders of Giants
- Video: Conversations with American Legends
- Staying Ahead of the Crisis
- A New Era of Insurance Marketing
- Infographic: Judgment Free Zone
- Infographic: Barriers to Entry
- Infographic: History Meter
- Assistance for Law Firms Engaged in Pro Bono
- Webinar: The End of Brand Neutrality
- Public Affairs
- The Fifth Estate: A Business Guide for Surviving “The Troubles”
- What to expect as the clock approaches midnight
- How to Stop the Madness
- Corporate Revolt Over Campaign Donations Shakes Political World
- No ‘justice’ in rep’s vote
- A Call for Orderly & Peaceful Transition of Power
- Recovering from the Greatest Sacrifice
- Food Issues & the Biden Administration
- The Cost of Government Regulation and the Threat to Free Enterprise
- What Happens Next?
- CSR & Sustainability
- A Conversation with Abbe Lowell
- Risk
- Ingredients of Decency
- ESG Performance and Credit Markets
- The Coronavirus Saga is Just Beginning
- No. 1 Risk of the Decade
- The Risk Evolution of Corporate Risk
- Extend Risk Management Reach
- Collective Action
- Risk Identifying Software
- The New Risk of Doing Nothing
- Political Unrest In Hong Kong
- High-Profile Kidnaps in African National Parks
- Cyber Resilience
- Social
- The Ministry of Common Sense
- How to Stop the Madness
- A Remembrance of Tommy Raskin
- No ‘justice’ in rep’s vote
- A Call for Orderly & Peaceful Transition of Power
- Recovering from the Greatest Sacrifice
- CSR & Sustainability
- A New Year’s Resolution
- Dropping the Mic
- Won’t You Be My Neighbor?
- Crisis, Covid, DEI & the Election
- MLK’s Memphis Address
- Technology
- Constella Intelligence Announces Hunter for Improved Investigation Capability
- Cyber Risk Institute Expands Its Profile
- Digital Politics: The Future of Voting Technology
- Ethics in Electronics
- The Cyber Bad Guys Are Getting Worse
- A First Look at the Google Antitrust Suit
- The Pause
- Cybersecurity Incidents of the Summer
- The Changing Digital Economy and Cyber Risks
- The Future of U.S. Manufacturing
- Tech CEO Summer Superbowl hearing
- Technology & Privacy Alert
- This Week
- A Remembrance of Tommy Raskin
- A New Year’s Resolution
- Over the River and Through The Woods
- Dropping the Mic
- Won’t You Be My Neighbor?
- The Cyber Bad Guys Are Getting Worse
- What We Hear
- Track of Time
- Video: Conversations with American Legends
- Conversations with American Legends
- A New Era of Insurance Marketing
- American Legend