N eedless curb on your right to choose a financial adviser? Or a noble step to protect you from deceptive adviser practices?

The financial service industry has both blasted and praised a new financial-service proposal by President Obama.

The proposal could have a huge impact on your retirement planning .

One financial-service industry faction sees the proposal as infringing on your freedom to pick the adviser of your choice and impairing your ability to use whichever bond and stock investment ideas you see fit.

Another faction lauds the proposal as a much-needed safeguard.

The differing views reflect a long-simmering dispute within the industry.

The stakes are high. Enactment or rejection of the new rules will determine which types of advisers can collect up to billions of dollars in client fees and in commissions.

Basically, Obama’s proposal calls for applying fiduciary rules to all financial advisers who provide financial planning advice including retirement planning advice.

The proposal would require more brokers to follow a fiduciary standard, which would make them put the best interests of clients above their own when providing advice on retirement savings.

The lower standard that now applies is the suitability rule, which requires brokers to sell products that fit their clients’ investment needs but does not require them to act in their clients’ best interests. It gives brokers greater leeway in how to allocate rollovers from company 401(k) retirement plans to individual retirement accounts (IRAs).

Some brokers use the existing leeway to steer people into retirement investments that have high fees and low returns, which cut the size of retirement nest eggs, Obama said in a speech at AARP in Washington, D.C.

But the proposal would limit investors’ choices, warned Brian Graff, executive director of the National Association of Plan Advisors (NAPA).

(This) rule will block Americans from working with the financial advisers and investment providers they trust simply because they offer different financial products like annuities and mutual funds with different fees, Graff said. This rule could even restrict who can help you with your 401(k) rollover.

Graff added: The best way to address concerns about ‘hidden’ fees is through better transparency, not by blocking 401(k) participants from working with the adviser of their choice. If the administration moves forward with this proposed rule, American savers will be forced to pay out-of-pocket for their financial advice, or be limited to financial products with identical fees. Tens of millions of American savers who cannot afford to pay out-of-pocket will lose access to their financial adviser or be severely restricted in their choice of financial products.

Many investors will simply be forced to do without any advice, Graff says.

In contrast, the Certified Financial Planner Board of Standards which awards the CFP designation to qualified planners praised the proposal:

As a fervent advocate for strong fiduciary standards in the provision of investment advice, (the) CFP Board is pleased to see the White House and Department of Labor take a critical step toward protecting American investors and their retirement savings through a fiduciary rule under ERISA.

We remain steadfast in our belief that it is appropriate for every adviser who provides financial planning advice including professionals providing retirement investment advice to do so under a fiduciary duty to their clients.