With millions of baby boomers on retirement's doorstep, new federal rules will put more pressure on brokers, insurance agents and other financial advisers to pitch investments that are in their clients' best interests.
President Barack Obama championed the tougher so-called "fiduciary" requirement -- one of the biggest changes to hit the financial world in generations -- to help save millions of investors from costly fees, improve retirement prospects and stem abuses that have claimed life savings in some cases.
In essence, it requires retirement advisers to suggest investments that are best for clients' circumstances and pocketbooks, regardless of what fees or commissions the adviser might miss out on.
Currently, such advisers must meet a looser requirement that their guidance be "suitable."
By some estimates, the result could be up to $700 billion in retirement funds moving to lower-cost accounts such as index mutual funds or exchange-traded funds, or ETFs.
The change starts taking effect a year from now but is already roiling the industry. It applies to brokers, agents and consultants who offer advice and products for retirement accounts such as IRAs, 401(k)s, annuities and lump sum pay-outs from pensions.
Professional advice about non-retirement investments, including regular brokerage accounts, isn't affected.
Critics say the current standard has allowed unscrupulous advisers to steer retirement savings or pension lump sums into overly risky products that pay high commissions, even though it might have been wiser and cheaper to leave their savings with the old employer.