The Department of Labor's push to expand the availability of objective investment advice will likely shake things up for brokers who advise clients on individual retirement accounts.

Financial advisors who haven't paid attention to the regulators' newly proposed rules, believing they apply only to advice given on 401(k) and certain other retirement plans, may be surprised to learn big changes are coming for IRA investment advice.

"Status quo isn't going to work, particularly for the IRAs," says Jason Roberts, a partner at law firm Reish & Reicher in Los Angeles.

The Labor Department released long-anticipated rules less than two weeks ago meant to ensure financial advisors provide unbiased advice at reasonable costs to retirement plan participants and beneficiaries. The proposal comes amid a broader push by lawmakers and regulators, following the market upheaval and investment scandals of the past 18 months, to motivate financial advisors to put their clients' interests first.

The rules would require financial advisors affiliated with a fund or insurance company to offer advice through an independent computer model or ensure that the compensation that financial advisors, their employers or employers' affiliates receive doesn't depending upon the investment choices a client makes in his retirement plan. Alternatively, financial advisors can provide education--general information about asset classes and allocation--but not specific investment advice.

"It's going to be critical for the financial advisors to understand the difference between education and advice--and in what capacity they can offer education versus advice," says Amy Glynn, director of retirements at Commonwealth Financial Network, an independent broker-dealer. Most financial advisors now don't understand this distinction, she says.

Clients whose brokers say they can't provide specific advice on retirement plans because they have incentives to recommend certain funds over others might wonder what other potential conflicts exist in the relationship, attorneys say.

The proposed rules could increase use of so-called wrap accounts for IRAs, in which clients pay a fee based on the size of their retirement account. They could also lead to the creation of new fee-based investment products.

"If adopted, I think it's going to cause a fundamental shift in the ways these firms do business," John Simmers, director of risk management and product development for the Compliance Department Inc. consulting firm, says of the Labor Department's proposal.

Some independent financial advisors and broker-dealers have been preparing for change. Commonwealth's fee-based retirement program has no preferred or exclusive financial arrangements with retirement product providers, Glynn says. That's meant to ensure Commonwealth financial advisors don't have incentives to recommend certain providers over others.