The US Labour Department has scrapped a rule about investment advice allowing financial advisors to work directly with retirement plan members.

The deparment’s Employee Benefits Security Administration, or EBSA, yesterday published a notice withdrawing the final rule on the provision of investment advice under the Employee Retirement Income Security Act's prohibited transaction provisions.

The notice overturns a final rule, set on 21 January that implemented a statutory prohibited transaction exemption.

“The department decided to withdraw the rule based on public comments that raised sufficient doubts as to whether the conditions of the final rule and the class exemption associated with the rule could adequately protect the interests of plan participants and beneficiaries.”