Department of Labor cracks down on retirement savings tips

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

the The Ministry of Labor announced It has finalized the Retirement Security Rule, which aims to protect American workers who are saving for retirement and rely on advice from credit agencies in this regard. The new rule will update the definition of a fiduciary for investment advice under the Employee Retirement Income Security Act and the Internal Revenue Code.

The rule would require “trusted investment advice providers to provide prudent, sincere, and honest advice free of excessive fees,” according to the department.

These fiduciaries should avoid making recommendations that “favor the interests of investment advice providers – financial or otherwise – at the expense of retirement savers,” the department said.

The department also said the rule would require financial institutions to have policies and procedures to address potential conflicts of interest and ensure advice providers follow the new guidelines.

“American workers and their families rely on investment professionals for guidance as they save for retirement,” Acting Labor Secretary Julie Su said in a statement.

“This rule protects retired investors from unsound investment recommendations and harmful conflicts of interest. Retired investors can now have confidence that their investment advice provider is working in their best interests and helping them make unbiased decisions.”