A White House official, reiterating comments made last week, said the administration has no update on the status of the Labor Department rulemaking.
 
Under current rules, brokers are held to a ‘suitability’ standard, meaning they must reasonably believe their recommendation is right for a customer. While the White House memo said the proposed fiduciary duty would help protect retirement savers, brokers have said it would substantially increase the costs of advising investors by adding extra paperwork and the risk of lawsuits.
 
The proposal, people familiar with the matter said, is about to go to the Office of Management and Budget for what could be a 90-day review. Once OMB signs off, it can be issued by the Labor Department. Then the public will be allowed to comment before a final regulation is completed.
 
That gives both sides most of this year to lobby.
 
The Labor Department has pressed to update the rules, which were issued in 1975. At that time, many workers had employer- controlled pensions and the 401(k) didn’t exist. Now, tens of millions of people invest for retirement through 401(k) plans and IRAs, which together hold more than $11 trillion.
 
Wall Street has spent more than four years lobbying against the Labor rule and successfully forced the department to withdraw its original proposal in 2011. They defeated another attempt to release a plan last August.
 
‘Political Battle’
 
“The Labor Department is in a big political battle,” said John C. Bogle, the founder and former chief executive officer of Vanguard Group Inc., who as a longtime advocate for small investors was one of the first people to push for the stepped up broker standard. “It is in deep politics, and that is a bad place to be.”
 
Still, Bogle said that he has talked to administration officials from time to time and is “very happy” about the progress thus far. “I feel like they are moving in the right direction,” he said.