"I am disappointed that this proposal eliminates the face-to-face advice permitted by the class exemption, depriving more than 10 million workers of access to this valuable form of advice," said Campbell, now an attorney with Schiff Hardin LLP.
Bruce Johnston, president of DBJ Associates, a consulting firm in the financial industry, said, "I find it incredible that the Labor Department would further penalize the American worker by failing to suggest or implement legislation that would actually allow them to receive investment guidance versus eliminate it. If the past few years aren't proof enough that plan participants need additional investment advice, not less, I don't know what sign the DOL might be looking for."
"They are putting up hurdles for advisors with no incentive to employers," said Louis S. Harvey, president and founder of Dalbar. "This is a market killer. We must have some incentive for employers to offer level-fee advice or this will die."
Others had a different take on the matter.
Compensation Skews Advice
According to a White House briefing document on the subject, "if investment advisors get a commission or other compensation for steering workers into investment options with high fees and expenses, they face conflicts of interest that can undermine the reliability of their advice."
There are plenty who feel the same way.
Roger Wohlner, a fee-only financial advisor with Asset Strategy Consultants, said it's great that advisors cannot benefit financially from any recommended investments under the proposed rules.
"Allowing advisors to steer participants into funds [or] investments from which the advisor stands to directly benefit-via sales loads, trailing fees, and the like-is a recipe for conflicted and likely sub-par advice for 401(k) participants," he said.
For his part, Edward M. Lynch, Jr., managing director of the 401(k) Advisors Group, said, "If you look at the broad intent, the Labor Department is effectively recognizing a fiduciary standard-[non-conflicted] advice only in the best interests of the plan and plan participants-as opposed to a less rigorous business or 'suitability' standard, which is a far lesser and potentially biased or conflict-of-interest ridden standard.
"The administration gets that people are upset about the conflicts rife within the industry and that, at least in this arena, is trying to raise the bar for good practices," Lynch said.