Retirement savers pay a hefty price when financial professionals put fees and commissions ahead of customers' best interests. Getty Images By Eleanor Laise, Senior Editor June 28, 2018From Kiplinger's Retirement Report The long struggle too protect investors from conflicted advice has taken one step forward and two steps back.SEE ALSO: Best States to Retire 2018: All 50 States Ranked for Retirement A U.S. Department of Labor rule that was set to take full effect in mid 2019 would have made all financial professionals giving advice on retirement accounts subject to a “fiduciary” duty to put clients’ interests first. But it suffered a near-fatal blow in March, when the Fifth Circuit Court of Appeals vacated the rule. Now the spotlight shifts to the Securities and Exchange Commission, which in April proposed new rules requiring brokers to act in clients’ best interests. Currently, brokers are held to a lower standard, requiring them to ensure that an investment strategy or transaction is suitable for a customer. While the SEC rule would be an improvement on the status quo, it lacks the teeth of the DOL’s fiduciary rule, investor advocates say. And it’s far from final. So for investors seeking advice, “it’s back to buyer beware,” says Barbara Roper, director of investor protection at the Consumer Federation of America. Advertisement When financial professionals base their recommendations on the fees or commissions they can pocket—rather than customers’ best interests—retirement savers pay a hefty price. Conflicted retirement advice costs investors $17 billion a year, according to a 2015 report from the White House Council of Economic Advisers. The SEC is aiming to help address the problem by requiring broker-dealers to act in the best interest of customers when making investment recommendations. Brokers can comply with the requirement in part by disclosing conflicts of interest, exercising reasonable care and skill to understand the products they’re recommending, and having a reasonable basis to believe that the transaction is in the customer’s best interest. But that may not be enough to protect retirement savers, investor advocates say. Although the rule is called “Regulation Best Interest,” it doesn’t clearly define “best interest”—and “that is a big problem,” as it leaves the door open for conflicted advice, says David Certner, legislative policy director for government affairs at AARP. The SEC proposal backs away from the DOL fiduciary rule’s requirement that investment professionals make recommendations without regard to their own financial interests. Confusing Titles and Standards for Brokers, Advisers The SEC also proposed to restrict brokers’ ability to use the title “adviser,” arguing that the title may mislead customers by making them believe their broker is a registered investment adviser (RIA). RIAs are already subject to a fiduciary standard and must put clients’ interests first. But presumably brokers “will come up with other titles that also sound good,” such as “wealth manager,” says Aron Szapiro, director of policy research at investment-research firm Morningstar. Advertisement The real issue is not the titles used but the confusing, varying standards that apply to different types of financial professionals, investor advocates say. No matter what form it ultimately takes, the SEC’s proposal can’t cover the same ground as the DOL rule. The fiduciary rule covered everything that can be held in a retirement account. But certain insurance products fall outside the SEC’s purview—so single premium immediate annuities, for example, aren’t covered. QUIZ: Put Your Retirement IQ to the Test Until August 7, the SEC is accepting public comments on its proposal . While the regulatory tussle continues, investors must protect themselves against conflicted advice. One approach: Work with a professional who must adhere to a fiduciary standard. You can find RIAs at adviserinfo.sec.gov. Read the adviser’s form ADV, which includes details on fees and disciplinary issues. The CFP Board of Standards also holds all certified financial planners providing financial-planning services to a fiduciary standard.