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Some watchdog groups that keep an eye on the financial industry are worried about the fate of a new Labor Department rule that's supposed to take effect this April. It says financial advisers have to act in their customers' best interest when giving them advice about their 401k retirement accounts. Under the Trump administration, that rule may be in jeopardy. NPR's Chris Arnold has more.
CHRIS ARNOLD, BYLINE: When you go to a doctor or a lawyer, they're required to act in your best interests. A financial adviser, though - no. It's often perfectly legal for an adviser to say, you should invest in these mutual funds - they're great - even though the fees are outrageously high, and the adviser gets a fat commission for getting you to buy them.
DENNIS KELLEHER: Too many advisers are doing that today. It's costing retirement savers tens of billions of dollars every year.
ARNOLD: That's Dennis Kelleher, the president of Better Markets. It's a Wall Street watchdog group. He says the new Labor Department rule stops that and forces advisers to act in their client's best interest. But while the rule is final, the industry has until April to comply. And with Trump in office, industry groups are lobbying hard to delay that April date and then to figure out how to scuttle the rule. On the other side of the fight, he says, are scores of organizations interested in protecting working Americans rights when it comes to retirement savings.
KELLEHER: Everybody from the AARP, the AFL-CIO, the Pension Rights Coalition, the Consumer Federation of America - and if you look at who's opposing the rule, it's the biggest banks and all their big, powerful Washington trade associations.
ARNOLD: In recent weeks, the industry trade press has been buzzing with predictions that the Trump administration is about to issue an executive order or in some other way delay compliance with the rule. Francis Creighton heads up government affairs for the industry group the Financial Services Roundtable.
FRANCIS CREIGHTON: What we've heard from the Trump administration is that they plan on delaying the rule.
ARNOLD: Industry groups have argued that the rule is costly and deters financial advisers from working with smaller clients, but Creighton acknowledges he still does not know what Trump will do.
CREIGHTON: And we're hoping to hear from them soon that they're going to do it or they're not going to do it so that our companies have some certainty about what they should do and what they shouldn't do and when because they're spending millions of dollars every single day implementing the rule right now.
ARNOLD: If you hear some urgency there, there might be another reason why, as well. There's that deadline coming up in April for compliance. If Trump doesn't act before then, the industry will be locked into the rule, at least for a while. That's according to Cristina Martin Firvida. She's with the AARP. She says Trump can't just outright kill this rule with an executive order.
CRISTINA MARTIN FIRVIDA: No, because the rule is already in effect and is final.
ARNOLD: That means, she says, it could take months or years to kill it, that is if Trump even tries to do that. The administration, she says, may decide to keep it in place unchallenged. Chris Arnold, NPR News.
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