For many investors, knowing where to turn for advice is one of the trickiest parts about planning for retirement. As Phyllis Borzi of the Labor Department explained to FRONTLINEs Martin Smith in The Retirement Gamble :

We have a system today where anybody can hold themselves out as an expert. They call themselves retirement planners, financial planners, advisers, etc. We dont have a standard way that the consumer can figure out who has the expertise to provide advice.

Borzi serves as the Assistant Secretary of Labor of the Employee Benefits Security Administration. As she sees it. much of the trouble with the retirement system is that most financial advisers are not bound by law to put their clients interests ahead of their own. In other words, they are not fiduciaries.

In the fall of 2010, Borzi unveiled a proposal to increase industry accountability by expanding the definition of who is deemed a fiduciary. The proposal was pulled back in September 2011, though, after a barrage of criticism from industry groups, lawmakers and even some consumer advocates. (Watch an excerpt from The Retirement Gamble below to see how the effort unfolded.)

Nearly two years later, the Labor Department is preparing another push. In July, it is expected to introduce revised guidelines for fiduciaries under the nearly four-decade-old Employee Retirement Income Security Act (ERISA). Few details have emerged about the new plan, but with the proposal carrying broad implications for investors and advisers alike, here is a brief guide to the sticking points left over from the initial drive for reform:

What counts as advice?

In order to be considered a fiduciary under ERISA, a financial adviser must meet a five-part test. Part of that test says that a person is only a fiduciary if he or she offers advice on a regular basis. So if an employer hires a planner on a one-time basis for advice on the company 401(k) plan, the adviser would not have to act as a fiduciary.

Likewise, ERISA rules say that unless there is an understanding between an adviser and an investor that any advice offered will serve as the primary basis for an investment decision, the adviser is not a fiduciary. Often, this allows brokers to avoid fiduciary obligations through disclaimers explaining that their services cannot be used as the primary basis for an investment choice.

The Labor Department sought to change all that by broadening ERISA guidelines. The new rule would have scrapped key elements of the five-part test in order to apply the fiduciary standard to anyone who provides investment advice for a direct or indirect fee to retirement plans or holders of an individual retirement account.

More than 300 public comments were filed in response to the proposal, with critics arguing the plan was overly vague. A plain reading of the standard would include as advice, for example, an interview with one of our officers or strategists providing general market color in the Wall Street Journal. or on Bloomberg or CNBC, wrote Don Thompson, a managing director and assistant general counsel at JPMorgan Chase, in one such letter .

Critics found a receptive ear on both sides of the aisle in Congress. In a letter. for example, 29 House Democrats said the plan would increase the costs of investment products, services, and advice that are absolutely critical parts of a sound investment strategy for consumers.

The Fight Over Compensation

In its original form, ERISA largely barred fiduciaries from accepting various types of commissions or revenue-sharing payments.

Over time, however, the department granted a range of exemptions that have moved the industry towards a compensation model where commissions and revenue-sharing are much more commonplace. And while consumer advocates complain the model presents a conflict of interest, industry groups argue it has meant greater savings, as well as a larger menu of options for investors.

Broker dealers provide enormous value to IRA investors, they provide enormous value to small business, and its critical that the broker dealer compensation model be taken into account in these new proposed regulations, said Kent Mason, an attorney for Davis & Harman LLP in Washington who advises clients on retirement plan issues. What enables a broker dealer to provide service at a relatively low cost to the small investor is the whole compensation model.

Changing that pay structure could also make financial advice much harder to come by, according to critics. At a July 2011 hearing, for example, the Securities Industry and Financial Markets Association estimated brokerage firms may have to eliminate services to millions of commission-based IRA accounts with less than $25,000 in assets.

Others doubt such assessments.

Wall Street and the insurance companies want to take the fiduciary standards and adapt them to their business strategies, as opposed to taking their business strategies and adapting them to the fiduciary standard, said Ron Rhoades, program director for the financial planning program at Alfred State College. Its going to cut into their profits, and thats what theyre fearful about.

The Department of Labor has been tight-lipped about which exemptions will carry over, but in December, Borzi told Bloomberg that, We have to be able to find that allowing these conflicted practices is ultimately in the best interest of participants and beneficiaries and, if we cant make that finding, were not going to issue the exemption.

Who Gets To Opt Out?

A major concern among consumer advocates, meanwhile, was an exemption in the proposal that would, in essence, allow an adviser to opt out of the fiduciary standard by informing clients of any adverse financial interest they may have. Under the so-called sellers exemption, a broker or adviser would also have to disclose that their recommendations are not intended to be impartial.

Simply knowing that a fiduciary has a conflict of interest changes none of the factors that make fiduciary standards necessary, according to Mercer Bullard. a professor of law at the University of Mississippi.  It may even exacerbate the clients overreliance on the conflicted fiduciarys advice if the candid admission of the conflict engenders greater, but still misplaced trust.

One possible solution is to allow the sellers exemption for sophisticated institutional investors, such as an employer-sponsored retirement plan, but not for less-informed individual investors.

I think it is possible but extremely difficult to come up with an approach on this issue that will improve protections for investors and be workable for the industry, said Barbara Roper, director of investor protection at the Consumer Federation of America. We really cant tell until we see what the Department of Labor comes out with.