With a new rule issued by the Department of Labor (DOL) this past week, small business owners will now be allowed to offer investment advice to employees on their 401(k), IRA or other retirement vehicles.

Small businesses that offer retirement plans were previously barred from giving investment advice since, as fiduciaries, offering advice would be a conflict of interest. Thus they had to hire outside investment advisers (who were independent of the funds being offered, such as Vanguard or Fidelity) to give such advice.

Now under the new rule, small businesses can offer investment advice under two conditions: 1) The advice has to be based on an "unbiased" computer model, or 2) The person giving the advice cannot have a financial stake in his or her recommendations; the adviser must be paid a flat fee regardless of the recommendations given or any subsequent investment decisions made by the employees.

“Given the rise in participation in 401(k)-type plans and IRAs, the retirement security of millions of America’s workers increasingly depends on their investment decisions,” said the Labor Department’s Employee Benefits Security Administration (EBSA) Assistant Secretary Phyllis C. Borzi in a statement. “This rule will make high-quality fiduciary investment advice more accessible, while providing important safeguards to minimize potential conflicts of interest.”

The Associated Press reported that 401(k) plans covering 17 million participants will start to offer investment advice under this regulation change. The Labor Department also estimates 3.5 million of these participants will seek advice from these investment advisers. In addition, the department estimates 17 million IRA beneficiaries will also seek advice.

The new rule takes effect Dec. 27.