The Department of Labor’s new rule that would permit advisers affiliated with fund companies administering a 401(k) plan to give advice, is drawing fire—so much so that industry observers don’t expect it to last.

The rule would permit an adviser to give advice if they either use a computer model that suggests appropriate investments given a person’s age and risk tolerance, or a flat-fee structure whereby they would not stand to benefit more for suggesting one fund over another.

In passing the new rule, the DOL said, “Access to professional investment advice is particularly important now for workers as they manage their 401(k) plans and IRAs in changing and volatile financial markets.”

One critic, however, is Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, who recently testified that the law is flawed because “it will allow financial services firms to offer potentially conflicted investment advise on workers’ retirement accounts.”

Financial planner Chad Griffeth agreed, telling Dow Jones, “The rule does not prevent potential for conflicted advice.

“The controversy exists in that the person delivering the advice must adhere to specific fiduciary criteria, but their affiliated firm, whether that’s a broker/dealer, mutual fund company, insurance company or bank, does not,” Griffeth said. “[This] opens the door on the part of brokerage firms and mutual fund firms at the sake of participants, whom I fear wouldn’t know what questions they should ask to ferret out conflicted advice.”

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