The Securities and Exchange Commission is trying to bridge the gap in investment advice standards for brokers and financial advisers, but the rift remains wide in one particular area: advice to 401(k) plan sponsors, Investment News reported. The SEC proposed Regulation Best Interest in mid-April as part of a broader rulemaking package. It would up the ante for brokers interacting with several retirement-account stakeholders — for example, owners of individual retirement accounts, employees rolling money out of a retirement plan and 401(k) participants deciding how to invest their money in-plan. Instead of just having to choose investments that are suitable for clients, brokers would be held to a more-stringent "best interest" standard, which isn't specifically defined in the proposal. However, 401(k) plan sponsors are left out of the equation because they don't appear to fall within the SEC rule's definition of "retail" investor, according to legal experts.
