The Department of Labor (DOL) formally issued a proposed rule that would extend fiduciary responsibility to everyone who provides professional financial retirement advice. In his announcement today, Department of Labor Secretary Thomas Perez stated the rule will require all financial advisors to provide advice that is in the best interest of their clients.
Currently, stockbrokers and other investment advisors can steer their clients toward investments that are more profitable for themselves or their firm, as long as the investments are "suitable" for their clients. According to a February report released by The White House Council of Economic Advisors, the conflicts of interest in retirement advice "cost investors up to $17 billion annually."
DOL regulators will seek comments from the public on the rule for a 75-day period after it is published in the Federal Register. A public hearing will be held within 30 days of the end of the comment period, and a second public hearing and opportunity for comment will take place after the transcript from the first public hearing is made public.