Labor Department cracking down on retirement savings advice

The Biden administration announced Tuesday that the Department of Labor will crack down on retirement savings advice to protect workers’ interests.

Ministry of Labor announced announced that it has finalized retirement security rules aimed at protecting American workers who save for retirement and rely on advice from fiduciaries to do so. The new rules would update the definition of investment advice fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.

The rules require “reliable investment advice providers to provide prudent, faithful and honest advice without charging excessive fees,” the ministry said.

The department said these trustees must avoid making recommendations “favoring the interests of financial or other investment advice providers at the expense of retirement savers.”

The department also said the rules will require financial institutions to have policies and procedures in place to address potential conflicts of interest and ensure that advice providers follow the new guidelines.

“America’s workers and their families are looking to investment experts for guidance as they save for retirement,” Acting Labor Secretary Julie Su said in a statement.

“This rule protects retirement investors from inappropriate investment recommendations and harmful conflicts of interest. Retirement investors want to ensure that investment advice providers have their best interests in mind and that they have an impartial intention. I can now trust them to help me make decisions.”