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DOL’s Fiduciary Rule Survives Fourth Court Challenge

A Kansas judge ruled in favor of the Department of Labor’s fiduciary rule on Friday in the latest win for the regulation that is scheduled to begin implementation on April 10, 2017.

Judge Daniel Crabtree ruled against Market Synergy, an insurance firm that develops fixed index annuities, and denied the plaintiffs’ motion for summary judgment. The original November 28, 2016 decision in the Market Synergy case was for a motion for preliminary injunction which was also denied by the court.

The move comes on the heels of Texas federal judge Barbara M.G. Lynn’s ruling in favor of the Labor Department earlier this month in a case brought by multiple plaintiffs, including the U.S. Chamber of Commerce, against the fiduciary rule. Federal courts have ruled in favor of the DOL in all four cases decided on the matter.

Critics claim that the rule would introduce liability that would essentially end access to financial advice by retirement saviors of modest means, who could not afford to pay directly for professional financial advice. Proponents argue that the rule would provide valuable safeguards against conflicted advice to those very same investors.

Earlier this month, President Trump issued a memorandum directing the Secretary of Labor to examine and prepare a cost-benefit analysis of the rule. The DOL is reportedly planning a 180-day delay of the rule and plans to seek a new round of public comment.

Also last week, the DOL requested that a Minnesota federal judge stay the current case brought by Thrivent Financial for Lutherans challenging the fiduciary rule.

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