As if people with 401(k)s didn't have enough on their minds: Not only do they have to worry about heavy losses from the economic downturn, but they have to fret over whether their brokers are benefiting more than they are.

Participants in 401(k) plans likely assume that the professional advising them has their best interests in mind when providing asset allocation advice. But surprisingly, this might not necessarily be the case.

Currently, registered investment adviser representatives have a fiduciary duty to put their clients' needs above their own and disclose conflicts of interest in how their firms might benefit from the recommendation. Brokers, on the other hand, are held to a less stringent “suitability” standard and are under no obligation to put investors' interests first or to disclose how their advice might benefit their firms.

But now, under a provision of the eight-month-old financial reform law, the Securities and Exchange Commission and the Labor Department may soon issue regulations designed to protect 401(k) participants by holding brokers to the same standard as advisers.

Why is this important? Let's say a broker gets paid a higher commission for steering a 401(k) participant to invest in a fund run by his firm. There is an inherent conflict of interest here that begs the question -- is there a better fund for investors' money than the one being recommended? The mutual fund could easily meet the suitability standard and the broker would not have violated any regulation. However, participants may be getting hit with higher fees than other suitable alternatives simply because their brokers are seeking higher commissions.

After the law passed, the SEC had six months to conduct a study and report back to Congress about the need for a uniform fiduciary standard. The study was completed at the end of January and the SEC recommended to Congress that brokers and advisers follow the same uniform standard of conduct. At this point, the SEC has the authority to implement rulemaking based on the findings of the study.

We anticipate we will start to see real action in the next six months.

In October, the Labor Department issued proposed regulations that would expand the definition of individuals deemed fiduciaries. The Labor Department, in its role of protecting the employee workforce of America, oversees retirement plans and has authority to audit companies' 401(k) plans.

The Labor Department felt the current definition of fiduciary would limit its ability to protect plan participants. The agency held a public hearing on March 1 to hear comments about these proposed regulations. On March 8, the agency opened a public comment period on the proposal.

Officials at the SEC and Labor Department said they are optimistic they can devise compatible sets of regulations.

Many broker firms are losing sleep over this pending change. Broker dealers are potentially facing enormous overhauls, involving extensive training and licensing. Most certainly this change would be disruptive to business and could impact client retention.

During my long career counseling more than 500 companies regarding their retirement programs, I have never felt a stronger need for a call to action. With Social Security vanishing, I believe that it is imperative for Americans to get the best advice possible to protect their 401(k) plans. The fiduciary standard is the best tool we have to help them.

Jania Stout is the founder of the Fiduciary Consulting Group in Hunt Valley, Md., and a vice president at PSA Insurance & Financial Services and president-elect of the Chesapeake Human Resources Association.