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President Obama wants to change the way brokers and investment advisers offer financial advice, saying the current system leads to high fees that erode returns on investments.

At present, brokers work under the suitability standard. This, in essence, means that while making a recommendation, brokers must reasonably believe that a product is "suitable" for a client. The Obama administration wants to change that. It wants to impose what is known as a fiduciary duty on brokers. That means the brokers would have to put their clients' interests over their own.

This, the administration says, would prevent financial advisers from steering clients to investments with high costs, hidden fees and low returns.

"Too many financial advisers have sales incentives to steer responsible Americans into bad retirement investments with high fees and lower returns that leave their clients with less in retirement," Jeff Zients, director of the White House National Economic Council, said in a conference call.

Obama is expected to announce later today that he will task the Labor Department with coming up with the new rules. The department explains the problem this way:

The White House estimates that conflicted advice costs working- and middle-class families a total of $17 billion in losses each year.

Today's announcement initiates a months-long process before the rules are finalized. As NPR's Chris Arnold reported, critics say the plan would make it harder and more expensive for average Americans to get good advice.

"This re-proposal could make it harder to save for retirement by cutting access to affordable advice and limiting options for savers," Kenneth Bentsen Jr., president and chief executive of the Securities Industry and Financial Markets Association, said in a statement.

A 2010 Labor Department proposal on fiduciary rules was withdrawn after strong opposition from Wall Street. The department says its new proposal "will not ban common compensation practices, such as commissions and revenue sharing, and it will continue to allow financial advisers to provide general education on retirement saving."

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Obama Wants Rules That Force Brokers To Put Clients' Interests First