Make Investment Advisers Put Your Interests First

A proposed Obama administration rule aims to end the bad investment advice that puts retirement dollars in mutual funds with high, hidden fees. If the Department of Labor rule is enacted, it could end up accelerating trends that are already slashing the cost of investing.

The rule is aimed at investment firms that aren’t required to put their clients’ interests first. Advisers at these firms, often traditional brokerages, are required only to recommend “suitable” investments, and they may have incentives to steer clients toward funds with higher costs or lousy performance. “Conflicts of interest can lead to bad advice and high fees,” Labor Secretary Thomas Perez said on Tuesday in a conference call.