“Upfront fees, if they have to pay them, they’re not going to get any professional advice at all,” Ms. Vogl said. “They’ll just go on the Internet or ask their uncle or something.”
The rule could also raise costs for customers.
“If you’re worrying about getting sued all the time, you’re going to have to raise fees to cover that possibility,” Mr. Little explained. “The cost of that service will go up.”
The Labor Department recently sent letters to top insurance industry trade groups requesting information on how the proposal would affect investors. They have until Friday to reply.
The Insured Retirement Institute said it was pleased the Labor Department is reconsidering the rule.
“We’re glad that they’re at least studying the issue, that they’re trying to get information and doing an analysis,” Mr. Little said.
Ultimately, the industry is hoping for a more workable proposal for advisers, he said. The new proposal is expected sometime in the first half of this year.