The fiduciary standard proposal released Tuesdayis, according to the Labor department, an improvement upon a 2010version in a number of ways.

Here’s how, in the DOL’s own words, as detailed in an agencyFAQ:

1. Provides a new, broad, principles-based exemptionthat can accommodate and adapt to the broad range of evolvingbusiness practices. Industry commenters emphasized thatthe existing exemptions are too rigid and prescriptive, leading toa patchwork of exemptions narrowly tailored to meet specificbusiness practices and unable to adapt to changing conditions.Drawing on these and other comments, the best interest contractexemption represents an unprecedented departure from theDepartment’s approach to PTEs over the past 40 years. Its broad andprinciples-based approach is intended to streamline compliance andgive industry the flexibility to figure out how to serve theirclients’ best interest.

2. Includes other new, broad exemptions. Forexample, the new principal transactions exemption also adopts aprinciples-based approach. And DOL is asking for comments onwhether the final regulatory package should include a new exemptionfor advice to invest in the lowest-fee products in a given productclass, that is even more streamlined than the best interestcontract exemption.

3. Includes a carve-out from fiduciary status forproviding investment education to IRA owners, and not justto plan sponsors and plan participants as under the 2010 proposal.It also updates the definition of education to include retirementplanning and lifetime income information. In addition, the proposalstrengthens consumer protections by classifying materials thatreference specific products that the consumer should considerbuying as advice.

4. Determines who is a fiduciary based not on title, butrather the advice rendered. The 2010 rule proposed thatanyone who was already a fiduciary under ERISA for other reasons orwho was an investment adviser under federal securities laws wouldbe an investment advice fiduciary. Consistent with the functionaltest for determining fiduciary status under ERISA, the proposallooks not at the title but rather whether the person is providingretirement investment advice.

5. Limits the seller’s carve-out to sales pitches tolarge plan fiduciaries with financial expertise. Thisresponds to comments that differentiating investment advice fromsales pitches in the context of investment products is verydifficult and, unless the advice recipient is a financial expert,the carve-out would create a loophole that would fail to protectinvestors.

6. Excludes valuations or appraisals of the stock heldby employee stock ownership plans from the definition of fiduciaryinvestment advice. The proposed rule clarifies that suchappraisals do not constitute retirement investment advice subjectto a fiduciary standard. DOL may put forth a separate regulatoryproposal to clarify the applicable law for ESOP appraisals.