Compliance February 25, 2025

Judge Approves DOL’s Appeal to Pause Fiduciary Rule Litigation

The circuit judge granted a 60-day abeyance in two lawsuits against the DOL over its Retirement Security Rule.

Reported by

A federal judge for the U.S. Fifth Circuit Court of Appeals granted a motion filed by the Department of Labor to delay its appeals in two court cases about the department’s 2024 Retirement Security Rule—also known as the fiduciary rule.

Judge Catharina Haynes granted the DOL’s unopposed motion to stay proceedings in the cases to allow new DOL officials sufficient time to become familiar with the issues in these cases and determine how they wish to proceed.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The court granted a 60-day abeyance in the case between the Federation of Americans for Consumer Choice, Inc. et al. v. U.S. Department of Labor and Acting Secretary Vincent Micone.

The DOL sought the stay in a filing on February 11.

The fiduciary rule was previously finalized by the department and scheduled to take effect September 23, 2024, but hit legal roadblocks in the form of complaints filed by industry firms and member organizations.

The U.S. District Court for Northern District of Texas put a national stay on the rule in a July 26, 2024 opinion in the case, American Council of Life Insurers v. DOL. One day prior to that ruling, the federal court in the Eastern District of Texas had also granted a stay for the plaintiffs in a separate case, Federation of Americans for Consumer Choice Inc. et al. v. DOL et al. 

Both lawsuits sought to block the rule, which required “trusted investment advice providers” and financial institutions working with them to operate as fiduciaries in most cases when advising on retirement plan design, annuity sales and individual retirement account rollovers.

Plaintiffs have argued in both suits that the DOL’s rule exceeded its authority under federal law, is “arbitrary and capricious” and had the “same legal defects” as the rule attempted in 2016, which was eventually struck down by the Fifth Circuit Court of Appeals.

The DOL has since argued that the rule currently being challenged is different from the one blocked 2016, in part because it more clearly addresses when retirement plan rollover advice and annuity sales fall under fiduciary guidance.

While Micone is listed as a defendant on the case filed by the Federation of Americans for Consumer Choice, President Donald Trump’s nominee for Secretary of Labor, Lori Chavez-DeRemer, awaits Senate confirmation. The Senate Committee on Health, Education, Labor and Pensions last week held a confirmation hearing on her nomination.

Compliance February 25, 2025

CFP Board Releases Technology Standard Guide for CFPs

The guide should assist CFPs in complying with the duty of care standards outlined in the board’s code of ethics and standards of conduct.

Reported by

The Certified Financial Planner Board of Standards has released the “Guide to CFP Board’s Technology Standard,” a resource designed to assist CFP professionals in complying with the duty of care outlined in Standard A.14, the technology standard, of the CFP Board’s code of ethics and standards of conduct.

The CFP Board’s Technology Standard:

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

  1. A CFP professional must exercise reasonable care and judgment when selecting, using or recommending any software, digital advice tool or other technology while providing professional services to a client;
  2. A CFP professional must have a reasonable level of understanding of the assumptions and outcomes of the technology employed; and
  3. A CFP professional must have a reasonable basis for believing that the technology produces reliable, objective and appropriate outcomes.

Possessing the necessary knowledge and skill to operate the technology effectively includes understanding both how to use key features and how to interpret the outputs in a meaningful way.

The new guide highlights the importance of understanding the full ecosystem of technology upon which a CFP professional relies, including knowing how data flow between different systems, identifying potential gaps in a technology stack and ensuring that the tools in use align with client needs.

When adopting new technology, professionals should assess how the new tool integrates with existing systems and whether it improves their ability to deliver client-focused financial advice, the standard states. Vendor due diligence plays a crucial role in this process, helping professionals evaluate potential risks, review documentation and make informed decisions about adopting new technologies.

The guide also addresses situations in which clients seek recommendations for personal finance tools, such as budgeting software. CFP professionals must first ensure compliance with their firms’ policies before making any recommendations. If permitted, they should clearly distinguish between endorsing a specific tool and providing general educational guidance on available options.

CFP professionals must critically evaluate the assumptions underlying any technology they use, ensuring these assumptions are appropriate and can be adjusted or validated where necessary. The guide stresses that financial planners cannot blindly rely on technology-generated outcomes. Instead, they must apply professional judgment to verify that results are accurate, unbiased and suitable for the client’s specific financial circumstances.

The CFP guide also applies to advanced artificial intelligence tools and analysis. It states that CFP professionals may determine that AI is a smart starting point for their work. However, it cautions that a CFP professional using AI tools when providing professional services to a client needs to always exercise reasonable professional judgment to evaluate the AI’s work product, as AI tools should not replace professional skill and judgment.

«