Earlier this week a Historic Overhaul of Finance Rules was announced:

Consumers: Creates agency with powers over mortgages, credit cards, savings accounts and annuities.

Shareholders: Pushes companies to give investors a greater say on executive compensation.

Hedge Funds: Brings hedge funds under federal regulation for first time.

Home Buyers: Requires lenders to hold a portion of new loans, a big change to the mortgage market.

Derivatives: Brings private trading of complex instruments onto big exchanges.

Big Change in Store for Brokers in Obama's Oversight Overhaul discusses how the changes would hold brokers to a higher fiduciary standard:

Buried in President Obama's proposed regulatory overhaul is a change that could upend Wall Street: Brokers would be held to a higher "fiduciary" standard that would compel them to place their client's interests ahead of their own.

Currently, brokers are only required to offer investments that are "suitable," which means they can't put clients in inappropriate investments, such as a highly risky stock for an 80-year-old grandmother. The move could change the way products are sold and marketed and even how brokers are compensated...

The proposal addresses a long-simmering debate over how brokers and investment advisers, who have traditionally offered more financial-planning advice, are regulated.

For years, investment advisers -- regulated by the Securities and Exchange Commission as part of the Investment Advisers Act of 1940 -- have been held to a fiduciary standard, meaning that in serving the clients, they have to put their clients' interests first. Brokers were excluded from that definition of investment advisers as long as they didn't get paid special compensation for that advice, and gave it as "solely incidental" to their brokerage services.

But over the years, that distinction became more blurred as brokers held themselves out as financial planners, even as they continued to operate under the more lenient standards. Making matters more confusing is the fact that some brokers became dually registered, operating under a suitability standard when they are selling products, but under a fiduciary standard when doling out investment advice....

The change also will give investors more power if they take their broker to court. "If a fiduciary violates his duty -- that is, gives advice which is contaminated by self-interest -- he could be sued not only for damages that have been caused for this advice but could also be sued for punitive damages," says Boston University's Ms. Frankel.

Tougher Financial Regulation Proposals May Hinder 401(k) Plan Sponsors discusses how the change to the fiduciary standard would impact 401(k) plan sponsors:

The proposed change could have big consequences for small plan sponsors, or those with 100 to 300 employees, which typically use brokers to manage their plans. "These employers should find out if their brokers are going to take on this additional responsibility or if it is a deal breaker," Ledbetter said. "Some brokers might decide they don't want to do this because the risk is too high."

As a result, some small plan sponsors might have to find new brokers to manage their plans, he said.

Another concern that some experts have about the proposal is that if it becomes law, it might actually end up watering down how fiduciary standards are currently defined.

"My concern is that they impose a fiduciary standard on brokers but they end up watering it down," said Don Stone, president of Chicago-based Plan Sponsor Advisors. "That would be bad news for all 401(k) plan sponsors."