Finanical organizations say president's plan could backfire

President Barack Obama is seeking tougher standards for brokers who manage retirement savings accounts—a move driving another wedge between the White House and groups representing Wall Street.

The U.S. Department of Labor is proposing brokers who sell stocks, bonds, annuities and other investments to disclose to clients any fees or other payments they receive for recommending certain investments, according to the Associated Press. Obama made the announcement Monday during a speech to AARP. http://yhoo.it/1FpFLyE

The Securities Industry and Financial Markets Association was among the business groups quick to criticize the plan. CEO Ken Bentsen noted that while SIFMA could comment on a proposal it has not yet seen, it has "ongoing concerns" the regulation would hurt people saving for retirement.

"The new regulation could limit investor choice, cause inconsistencies as different regulators would apply different standards to the same retirement accounts, prohibit access to investor guidance and raise the costs of saving for retirement," he said.

Financial Services Roundtable also urged caution.

"While concerns about improper actions by investment advisors should certainly be addressed, an overly broad proposal could price professional financial guidance beyond the reach of many modest-income families," FSR CEO Tim Pawlenty said. "A sledge hammer is not needed where a regular hammer would fix the problem without causing unintended damage."

However, Obama's announcement won him accolades from AARP, which said Americans saving for retirement currently lose $6 billion to $17 billion annually because of bad investment advice.

"We know the people we represent have worked hard to save for retirement, and we believe that they deserve to have financial advisers who work just as hard to protect what they've earned," AARP CEO Jo Ann Jenkins said.