BlackRock Says Broker-Bias Rule Bends Toward Index Funds

The world’s largest money manager said the U.S. government’s effort to protect retirement savers from excessive fees and unscrupulous brokers would favor index funds at the expense of other products investors should use.

BlackRock Inc.’s views, outlined in a letter sent to the Department of Labor Tuesday, adds pressure on President Barack Obama’s administration to change a proposal that would tighten rules on brokers who handle retirement accounts. The government’s plan would force brokers to act in the best interest of clients even when such a recommendation earns them lower fees.