The Department of Labor's (DOL) fiduciary rule has been a subject of debate and revision for years. The rule's latest iteration, proposed in 2023, aims to protect investors by ensuring that financial advisors prioritize their clients' best interests when recommending retirement investments. While still under consideration, this rule has the potential to significantly impact how companies structure their 401(k) plans.

To better understand the DOL's objectives, let's start with some context. The Employee Retirement Income Security Act (ERISA) was enacted in 1974 to regulate retirement plans. ERISA established fiduciary standards, which are more stringent than suitability standards, as the basis for governing investment advice. Fiduciary standards and suitability standards are both crucial concepts that determine the level of care a financial advisor must provide when offering investment advice. Suitability standards only require recommendations to be "suitable," while fiduciary standards demand the highest possible level of care. Many advisors work under suitability standards only.

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