Obama looks to crack down on abuses in 401(k) advice biz

The Obama administration on Friday is proposing regulations aimed at protecting workers’ retirement savings.

The safeguards would protect workers from conflicts of interest on the part of financial advisers who manage their 401(k)s and individual retirement accounts, an administration official said, speaking on condition of anonymity because the proposal had not yet been formally announced.

The proposed regulations would require retirement investment advisers and money managers to either: base investment advice on objective computer models certified by independent experts; or refrain from steering workers into funds they are affiliated with or from which they are receiving a commission.

Vice President Joe Biden was to announce the proposal during a meeting of the White House Middle Class Task Force. Retirement security is among the task force objectives.

If the Labor Department enacts the proposed regulations, the rules would apply to all financial institutions that offer 401(k) programs to employers and offer financial advice to their employees. The administration says the protections would affect tens of millions of workers across the country.