The Department of Labor will release Wednesday morning what Secretary Thomas Perez calls a “streamlined” final version of a regulation that would raise investment advice standards for retirement accounts.

In a conference call with reporters Tuesday afternoon, Mr. Perez said the agency had listened to criticism of the measure — which would require advisers to act in the best interests of clients in 401(k) and individual retirement accounts — and modified it.

“We have streamlined this rule to make it workable and doable,” Mr. Perez said. “I am quite confident industry will be able to comply with the streamlined rule.”

Key Points • The initial implementation period for the rule has been extended from eight months to one year. Full compliance is “phased in” and won’t be required until Jan. 1, 2018. • The final rule clarifies that the best interest contract exemption does not have to be signed until an account is opened. • The disclosures required under the contract have been reduced, including the elimination of the one-, five- and 10-year projections of returns and fees at the point of sale. • The exemption has been clarified to ensure there is no bias against the sale of proprietary products. • The list of approved investment products for retirement accounts has been removed.

The rule is expected to be posted around 11:30 a.m. in the Federal Register, when Mr. Perez, Sen. Elizabeth Warren, D-Mass., and other supporters host a launch event at the Center for American Progress in Washington.

WHAT’S CHANGING

Several of the changes involve the so-called best interest contract exemption. The legally binding exemption requires advisers to act as fiduciaries, but also gives them flexibility in compensation arrangements, allowing them to charge commissions or take revenue sharing.

The final rule clarifies that the contract does not have to be signed until an account is opened. Critics asserted the proposed rule would require the contract to go into effect before beginning a discussion with a client.

The disclosures required under the contract have been reduced, including the elimination of the one-, five- and 10-year projections of returns and fees at the point of sale. The exemption has been clarified to ensure there is no bias against the sale of proprietary products. In addition, the list of approved investment products for retirement accounts has been removed.

The exemption in the final rule also allows investment advisers who charge a “level fee” to provide advice to clients about rolling over assets from 401(k) plans to IRAs without having to sign the contract as long as they can show that the rollover is in the client’s best interest.

Another change is that the initial implementation period for the rule has been extended from eight months to one year. Full compliance is “phased in” and won’t be required until Jan. 1, 2018.

(More: 10 frequently asked questions about the DOL rule)

Putting out the eagerly awaited and controversial final rule today increases the chances the regulation will go into effect before the Obama administration leaves office in January.

Congress will have 60 days to review the rule after it is published in the Federal Register. If lawmakers vote to rescind it, the resolution likely would be vetoed by President Barack Obama.

Introduced nearly a year ago with backing from Mr. Obama, the rule is designed to reduce conflicts of interest which the White House argues encourages brokers to sell high-fee investment products that erode retirement savings.

“With the finalization of this rule, we are putting in place a fundamental principle of consumer protection into the American retirement landscape: A consumer’s best interest must now come before an adviser’s financial interest,” Mr. Perez said. “This is a huge win for the middle class.”

He later added: “Today’s rule ensures that putting clients first is no longer a marketing slogan. It’s the law.”

But the rule has ignited controversy. Financial industry interest groups have said the proposed version was too complex and would significantly increase liability risk and regulatory costs for advisers, making advice much more expensive to give and receive.

“Policymakers should do everything they can to help Americans be more prepared for retirement, not create miles of red tape that makes saving for retirement even more difficult,” Financial Services Roundtable chief executive Tim Pawlenty said in a statement Tuesday, before the final version of the rule was released.

(More coverage: The DOL fiduciary rule from all angles)

The rule would raise the advice bar for brokers, who currently must ensure their recommendations are “suitable” for clients rather than in their best interests. The financial industry has asserted that the rule will force brokers to abandon investors with small accounts because it will be too costly to service them.

“I refuse to believe that just because your savings are small means that they’re not worthy of big protections,” Mr. Perez said.

The White House will continue the battle for the rule, primarily by keeping Capitol Hill Democrats on board.

“There are some powerful interests aligned against us insisting that the only good rule is no rule at all,” Jeff Zients, director of the National Economic Council, told reporters.

InvestmentNews will continue to follow this story as the final rule is released and sources have time to analyze the contents and likely consequences.