It is about time the government put tougher standards on retirement savings brokers, Vanguard Group founder Jack Bogle told CNBC on Wednesday.
President Barack Obama this week directed the Labor Department to proceed with new rules to rein in conflicts of interest among brokers who advise clients on retirement investments. The regulations would mandate that brokers follow a "fiduciary standard" to prioritize clients' interests over brokers' interests. The brokers would have to disclose any fees or payments they receive for recommending investments.
"This is a good start. The retirement plan business … is a huge business," Bogle said on "Squawk on the Street." "We can make some inroads calling for advisors to have fiduciary duties there."
Currently, brokers are required to only recommend "suitable" investments based on the client's finances, age and the amount of risk appropriate for the investor.
The proposal will undergo a review by the White House's budget office. Then, the Obama administration will gauge the public's thoughts.
"Anybody who follows my career knows I've been speaking out a broad standard of fiduciary duties for as long as I can remember," Bogle said. "I hope that one day we get that standard of fiduciary duty applied to everybody who puts their hands on anybody else's money."
—The Associated Press and Reuters contributed to this report.