In what is being perceived as a major development in the debate over 12b-1 fees, the U.S. Department of Labor has delivered an advisory opinion that says banks, brokerage firms and investment firms cannot accept payments from mutual fund firms in exchange for guiding retirement account customers into those funds.

The government's opinion on 12b-1 fees was revealed in a May 11 letter to Country Trust Bank, an Illinois savings institution, according to a report in yesterday's New York Times. The letter stated that a fiduciary like Country Trust must not steer a plan into a transaction that will cause "consideration from a third party in connection with such transaction." If that does occur, the fiduciary must cut other fees charged to the plan participant by the same amount it received from the third party.

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