Home Alts News FSI Challenges DOL Independent Contractor Rule Withdrawal

FSI Challenges DOL Independent Contractor Rule Withdrawal

The Financial Services Institute has joined in filing an amended complaint against the Department of Labor, challenging the delay and withdrawal of its final independent contractor rule.

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The Financial Services Institute, a trade group representing independent financial advisors and independent financial services firms, has joined in filing an amended complaint against the Department of Labor, challenging the delay and withdrawal of its final independent contractor rule. The DOL repealed the rule on May 6, 2021, one day before its delayed effective date.

FSI said that the rule would have provided clarity and certainty around independent financial advisors’ independent contractor status.

“The DOL’s independent contractor rule codified the long-standing ‘economic reality’ test for determining worker classification…,” said Dale Brown, FSI’s president and chief executive officer. “Independent financial advisors choose to be independent contractors – many of them voluntarily switching from an employee advisor model – so that they can operate their own business and better serve their clients.”

Brown also claims that the DOL’s “hasty and arbitrary delay and subsequent withdrawal” of the rule puts it in violation of the Administrative Procedures Act.

“The rule’s withdrawal will result in the return to the confusing and conflicting interpretations previously applied by differing courts, causing our members and other properly classified independent contractors to divert time and resources to defending their independent contractor classification from unnecessary challenges,” added Brown.

FSI joins the Associated Builders and Contractors Inc., the Associated Builders and Contractors of Southeast Texas, and the Coalition for Workforce Innovation in filing the amended complaint, which can be read here, in the U.S. District Court for the Eastern District of Texas. The initial complaint was filed in March.

The Financial Services Institute has more than 80 independent financial services firm members and their 130,000+ affiliated financial advisors – which comprise more than 45 percent of all producing registered representatives.

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