Some big retirement plans offer investors the chance to hire an independent adviser that can help them choose their investments. But your plan provider will soon be able to offer the advice itself, as long as it meets rules issued recently by the Department of Labor.

Before the new regulations, which are effective Dec. 27, 401(k),  individual retirement plan providers were required to hire an independent adviser to provide advice. That’s because the Employee Retirement Income Security Act, the law known as Erisa that governs retirement plans, prohibited advisers from recommending investments if they were paid for other services like administering the plans in the first place. This was to avoid conflicts of interest where the administrator would put its own mutual funds  on the menu and push them on participants.

But now, the rules will allow for an exception. Retirement plan providers, including big companies like Fidelity, Vanguard or T. Rowe Price, can offer the advice themselves as long as they avoid conflicts of interest by meeting one of two conditions. First, any fees the adviser receives cannot vary based on the investments it recommends; in other words, it can’t get more money for pushing one type of fund over another. Or it must must provide the advice through a computer model that has been certified as unbiased by an independent expert.

Both options must also satisfy other conditions, including the disclosure of the adviser’s fees and an annual audit of the arrangement.

“The need for quality investment advice is very important because this type of advice can help investors avoid these costly investment errors,” said Phyllis Borzi, assistant secretary of the Department of Labor’s Employee Benefits Security Administration.

The hope, she said, is that the new rule, which is being put in place as part of the Pension Protection Act of 2006, will cause more retirement plans to offer investment advice. The department estimates that the increased use of such advice could reduce investment mistakes by $7 billion to $18 billion annually, Ms. Borzi said.

Still, what’s to stop the plan providers from favoring their own home-cooked investments, some of which may be more expensive, even if the model is seemingly free of conflicts of interest on the surface?

The auditor’s job, Ms. Borzi said, is to make sure the arrangements are not biased. “Clearly, we have to enforce this regulation in a way to make sure people don’t try to get around it,” Ms. Borzi said, adding that people who violate the rules must pay an excise tax.

The new regulation is separate from another set of rules the Labor Department is working on, which will “identify the class of people who are fiduciaries,” Ms. Borzi said. That proposed rule could come as soon as January.

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