In the wake of criticism regarding its proposed rule to enhance the investment advice standards that brokers must abide by when working with retirement accounts, the U.S. Department of Labor official reportedly will make modifications. Under the current proposal, brokers would have to act in their clients\u2019 best interests in individual retirement accounts and 401(k) accounts. <\/p>\n
The Labor Department introduced the fiduciary rule proposal earlier this year with the backing of the White House. Public comments were sought. <\/p>\n
Members of the financial industry have been critical of the proposal\u2019s provision over best interest contract exemption. By signing a legally binding duty with a client to be in a fiduciary relationship with him\/her, a broker is entitled to collect compensation in numerous ways, including commissions, as long as he\/she acts in that client\u2019s best interests. Some have expressed concern that such an agreement at the start of talks between a potential client and a broker could be problematic. Others are worried that certain costly changes would have to take place for brokers and their firms abide by the rule, and clients may end up having to foot the extra fees. <\/p>\n