The stakes of the Labor Department's new retirement advice rule are high, as a comparison of potential industry compliance costs with the possible savings for 401(k) investors displays.
For Labor's Employee Benefits Security Administration and advocates of the updated Employee Retirement Income Security Act, independent research firm Morningstar's projection that the rule could save investors as much as $87.5 billion in the next 10 years easily justifies the agency's estimated compliance expenses of $3.5 billion over the same period. To opponents, Oxford Economics' calculation on behalf of the Financial Services Institute (an advocacy group representing independent brokerages and advisors) that implementation over the next 10 years could cost the industry more than $25 billion calls the whole rulemaking into question.