The Department of Labor has suspended a Bush Administration rule that would have allowed financial advisors to provide investment advice to their 401k customers.
The Pension and Protection Act of 2006 contains a provision that allows financial advisors who manage company 401k plans to provide investment guidance to the 401k plan participants.
The DOL suspended the rule out of concern for apparent regarding conflict of interest. The concern is that the advisors who sell products may have incentives to provide biased advice that is not in the best interests of the plan participants.
The ruling will affect many firms, including companies such as Fidelity and Vanguard.
The rule has been "withdrawn" which effectively means that the provision is dead.
Sources: AP and Wall Street Journal
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