The Department of Labor Monday took a big step forward in a move that immediately re-ignited the intense debate over whether securities brokers should be subject to the fiduciary rules in the Employee Retirement Income Security Act.
In sending its reworked and long-awaited "conflict-of-interest" rule to the Office of Management and Budget, the DOL triggered a 90-day review of a change aimed at protecting workers and retirees. The rule will not be made public until after that process.
The fiduciary standard has long applied to retirement plan advisors, meaning they must put their clients' interests ahead of their own. Broker-dealers, on the other hand, are held to a lower standard called "suitability." Critics say brokers who work on commissions often steer clients to the mutual funds that pay them the highest fees.
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