Advisers could give 401(k) counsel under new rule

The Office of Management and Budget has cleared a Department of Labor rule that will allow financial advisers affiliated with mutual funds and brokerage firms to provide direct investment advice to 401(k) plan participants. The new administration could rescind the rule, which congressional Democrats have criticized for allowing conflicts of interest (Oct.12, 2008). Under the rule, advisers affiliated with companies that underwrite 401(k) investments for the first time could provide investment advice to plan participants, as long as the fees earned by the advisers didn’t differ, regardless of what investments they recommended that plan participants purchase. House Education and Labor Committee chairman George Miller, D-Calif., has promised to revisit the rule, which he and others on his committee think will lead to advisers offering conflicted advice to plan participants.