Labor Secretary Thomas Perez on Tuesday revealed the DOL'smuch-anticipated redrawn fiduciary standard, taking aim atconflicts of interest by brokers that, he said, are costing unawareAmerican workers billions in lost retirement savings.

The new rule, he said, is designed to protect investors whileoffering “considerable flexibility” in how financial advisors getpaid. It's about providing “guardrails but not straitjackets,” hesaid.

Advisors, he said, should be able to do well “in their bottomline,” even with the new standard, which was approved by the Officeof Management and Budget after a 50-day review but is stillsubject to a public comment period and hearings.

The changes would extend protections to the $7.4 trillion heldin IRA accounts, a common vehicle for retirement savingsthat barely existed when the original rules were issued 40 yearsago.

Brokers would still be allowed to earn sales commissions andother fees paid by mutual funds as long as they sign a new“best-interest contract exemption” with their investors, Perezsaid.

“It’s a straightforward agreement so you know you’ll get advice oninvesting your retirement savings that puts your interests first,”Perez said in a blog post that accompanied the DOL'sannouncement.

The best interest contract exemption, the DOL said, would be usedby advisers who make investment recommendations to individual planparticipants, IRA investors and small plans.

It would require those advisers and their firms to formallyacknowledge their fiduciary duty and enter into a contract in whichthey pledge to give advice that is in the customer's best interestand to make "truthful statements about investments and theircompensation.”

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