03:37 PM EDT, 04/23/2024 (MT Newswires) -- (Updates with details and responses from trade groups.)

The US Department of Labor on Tuesday finalized its Retirement Security Rule, which updates the definition of an investment advice fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.

The final rule and amendments to related prohibited transaction exemptions now require trusted investment advice providers to give "prudent, loyal, honest advice free from overcharges," a Labor Department news release said.

Trade groups such as the Insured Retirement Institute, or IRI, have opposed several attempts to expand fiduciary requirements to more firms or providing regulators with additional oversight authority. IRI last month called the initiative "unnecessary and harmful."

IRI members include insurers like National Western Life Insurance (NWLI) and Principal Financial (PFG), and brokers and investment advisors Charles Schwab ( SCHW ) and JPMorgan & Chase (JPM). A similar effort by the Obama Administration in 2016 was eventually overturned by the US Court of Appeals.

The finalized rule will be published in the Federal Register later this week. The updated definition of an investment advice fiduciary will become effective in September.

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