A last-minute Bush administration regulation that would permit advice in 401(k) plans was called into question Tuesday by a number of consumer advocates and other experts who testified before the
The proposal, finalized on Jan. 20, would potentially permit plan administrators to give self-interested financial advice to participants. Witnesses testified that it would permit financial advisers to charge higher fees and give conflicted investment advice on products in which they have a financial interest.
If workers receive investment advice, it should be independent and free of conflicts of interest, said U.S. Rep Rob Andrews (D-N.J.), chairman of the subcommittee. During a time where American workers have already lost $2 trillion in assets due to last years market downturn, exposing their hard-earned retirement savings to greater risk by allowing advisers to offer them conflicted advice is irresponsible and imprudent.
Mercer Bullard, founder of