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As part of its initiative to curb junk fees, the Biden administration is setting its sights on retirement plans.

In October, the Department of Labor proposed a rule aimed at closing loopholes and requiring financial advisors to provide retirement advice in the best interest of clients. It would expand on the current fiduciary standard that covers advice related to purchasing securities to include types of nonsecurities, affecting recommendations for IRA rollovers and advice to retirement plan sponsors and employers.

Financial advisors who act in the best interest of clients are known as fiduciaries. They are ethically and legally bound to put their clients’ interests ahead of their own.

“Perhaps the easiest way to understand the intended effect of the proposed rule is to envision a fiduciary umbrella,” said Matthew Eickman, national retirement practice leader for Qualified Plan Advisors in Overland Park, Kansas, in an email. “The current fiduciary umbrella provides the opportunity for strong coverage of assets while they’re in the retirement plan but most often doesn’t extend to recommendations to move assets out of a plan or what to do once the assets leave the plan.”

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