The Department of Labor Friday completed rules through which investment advisors such as insurance agents can provide advice to beneficiaries of self-directed retirement plans such as 401(k)s and individual retirement accounts.
The new rules quickly drew immediate fire from Democrats in Congress, who called them a last minute “payback to Wall Street” by the Bush administration as it leaves town.
The final rule provides general guidance on the requirements for advisors who provide investment guidance to individuals participating in a retirement plan, as well as requirements for disclosures by fiduciaries.
The regulation also includes a model form to assist advisers in satisfying the rule’s fee disclosure requirement. In addition, it includes a class exemption expanding the availability of investment advice for plan participants, including use of computerized programs.
The agency acted only 5 months after it proposed rules designed to tell advisors how to comply with provisions of the 2005 Pension Modernization Act.
“We are disappointed that the Bush administration moved forward to enact a new regulation that will make it harder for workers to receive fair and honest advice when making key financial decisions about their futures,” said Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee, and Rep. Rob Andrews, D-N.J., a ranking member of the committee.
“With just a few hours to go, the Bush administration is still scrambling to give Wall Street a last-minute payback,” they said.