The New York Times (September 18, 2015) -- A DOZEN or so new victims file into Joseph Peiffer’s law offices each month.

There was the 51-year-old woman who worked at BellSouth, he recounted, who was told to invest her retirement money into nontradable real estate securities. He has also worked with retirees who were advised to put their I.R.A. savings into pricey variable annuities or other illiquid investments, when other options would have been far more appropriate.

“It is really on the broker to do the right thing, because the typical investor doesn’t know enough to know if the broker and his firm have the investor’s interest at heart,” said Mr. Peiffer, a consumer lawyer in New Orleans who represents investors with cases against banks and brokerage firms.

Many brokers already do the right thing for their customers. But Mr. Peiffer said a new rule by the Labor Department that had been in development for five years would go a long way to help protect average investors from those who don’t. The proposal would require more financial professionals, including brokers, to put their customers’ interests ahead of their own when they are providing advice on how to invest in tax-advantaged retirement accounts, such as individual retirement accounts and 401(k)-type plans.

“It should prevent the worst abuses that I have seen and, even if that means less cases, that’d be great as far as I’m concerned,” he said. “I’ve seen too many proud 65-year-old men break down in my office because they have to move in with their children.”

Under current standards, brokers only have to recommend suitable investments, a requirement that permits them, for example, to recommend a more expensive fund that pays a higher commission even when an identically performing, cheaper fund would have been the better choice.

But many in the brokerage and insurance industries, where conflicts of interest are often embedded in the way they do business, are upset over the plan. Some stakeholders are trying to slow the rule-making process, while others are trying to stop it with legislation.

The latest round of criticism was on display last week, when industry members testified before congressional subcommittees, and last month, during a four-day public hearing held by the Labor Department.

“The people who are rattling the sabers the loudest tend to get the most attention,” Thomas E. Perez, the secretary of labor, said in an interview. “But we have heard more frequently from industry stakeholders who understand and agree this is the wave of the future — an enforceable best-interest commitment.”

Mr. Perez vowed to introduce the rule, most likely in the first half of next year. People with retirement accounts, however, probably won’t see its full benefits until many months later because it will be slowly phased in.

Here’s how the rule could change things: Financial professionals working with retirement accounts would need to act in their customers’ best interest, and they would not be allowed to accept compensation or payments that create a conflict unless they qualify for an exemption that ensures the customer is protected.

Brokers will still be allowed to charge commissions and engage in a practice known as revenue sharing, where, for instance, a mutual fund company may share a slice of its revenue with the brokerage firm selling the fund. Companies that pay more may get a spot on the firm’s list of recommended funds.

But to accept that kind of compensation, brokers and others will be required to enter a contract with clients stating that they are putting the customer’s interests ahead of their own. They must also disclose any conflicts, try to mitigate them and maintain a website detailing how they are paid. They must also charge “reasonable” compensation and detail investors’ total costs in dollars.

“The rule’s biggest strength is that it fundamentally changes the way that retirement advisers will view their relationships with clients,” said Arthur Laby, a professor at Rutgers School of Law.“It sends a strong message that any behavior short of a fiduciary standard of conduct is unacceptable.”

The contract should provide individuals with more protections and better enable them to hold brokers accountable. Most of these disputes would be resolved in arbitration, not the courts, because nearly all investment firms require investors to settle issues that way. That said, customers cannot be required to sign away their rights to a class-action suit.

The concept isn’t entirely new. Investment advisers, who generally register with the S.E.C. or a state securities regulator, already are required to put their client’s interests first. They won’t be required to use the contract in most instances, because many charge transparent fees for their advice and their compensation is not tied to the recommendation of any products. But even these advisers will have heighted obligations when handling retirement money.

Brokerage and insurance industry players have many issues with the so-called best-interest contract, including when it should be presented when meeting with prospective customers. Secretary Perez and his team members say they are taking those comments under consideration.

Juli McNeely, president of the National Association of Insurance and Financial Advisors, whose members include insurance agents and brokers, runs a financial services firm in Spencer, Wis., where the average customer has about $71,000. She said she believed that the proposal was well intentioned, but that the rules appeared overly burdensome.

“The cost of compliance and liability we are facing would outweigh the revenue we get from small accounts,” she said.

But consumer advocates, academics and others challenge the broad-brush criticisms the industry continues to throw up, many of them laid out in the more than 2,700 comment letters filed on the issue. The Securities Industry and Financial Markets Association and several other trade groups, for instance, have complained that the rule is simply “unworkable.” More regulations will unleash more litigation, the groups say.

“You have this public message from the industry, ‘Oh, we are all for a best-interest standard,’” said Barbara Roper, director of investor protection at the Consumer Federation of America. “But then when you read what it is they are advocating, they are proposing changes that go to the heart of the very rule.”

Receiving conflicted advice can cost investors tens of thousands of dollars, if not more, over the course of their careers and retirement. It shaves about 1 percentage point a year from investors’ returns, or about $17 billion in total, according to Labor Department calculations.

Many Republicans in Congress have vowed to block the Labor Department, but the proposal is strongly supported by President Obama, who has promised to veto any stand-alone legislation that would try to kill the rule. That hasn’t stopped Representative Ann Wagner from trying. Ms. Wagner, a Republican from Missouri, where many brokerage firms opposing the rule are based, recently revived a bill passed by the House in 2013, which would require the Securities and Exchange Commission to pass a rule first. The commission hasn’t decided whether it will do that.

“In my view, the argument to delay, in some cases, is based on a hope that the S.E.C. will not act, or will adopt a rule that will weaken the applicable fiduciary standard,” Professor Laby said in his testimony before the Labor Department last month.

Alternatively, a rider could be attached to a spending bill that states the Labor Department is not permitted to spend any part of its budget on the rule. That could be more difficult for the president to veto, advocates say, if the possibility of a government shutdown were looming.

“That is a threat we are watching very closely,” said Marilyn Mohrman-Gillis, managing director of public policy for the Certified Financial Planner Board of Standards.

But a more likely course of action may be a lawsuit, which means it could be left to the courts to decide. “We know the opposition has already signaled they plan to file a lawsuit prohibiting the implementation of the rule on legal grounds, specifically the authority of the Department of Labor,” Ms. Mohrman-Gillis added.

For retirees like Deborah DePasquale, 64, the rules can’t come fast enough. After working with a broker for four years, she discovered that she and her spouse, Mary Guhin, were being charged what they said were exorbitant commissions, among other abusive practices.

“If average people like me were savvy enough to understand everything financial, we wouldn’t need to depend on brokers,” Ms. DePasquale said. “I should be able to trust them to act in my best interest — and not against me.”