Other than your brother-in-law, can you trust the people giving you investment advice?

That question is at the heart of recent government rules mandating that providers of retirement investment advice only make recommendations that are in the best interest of their clients. It replaces a "suitability" standard, under which a broker could recommend products that may be more expensive for the client but more profitable for the broker as long as it is deemed "suitable" for the level of risk tolerance and financial sophistication of that client.

The idea that a client's interest should come first may seem obvious, but nothing is obvious at the intersection of government regulation and the financial services industry.

Earlier this month the U.S. Department of Labor (DOL) handed down a set of regulations that will affect millions of Americans who hold retirement savings, from accounts. After several years of discussion, hearings, Congressional threats to block DOL action, draft proposals and revisions in response to thousands of comments, details around implementation are still being worked out and opponents are reportedly contemplating lawsuits to delay or block the rules altogether.

One thing is certain though, the investment industry is churning as it digests changes that have been several years in the making. What do you need to know about the new DOL regulations?

Most importantly, the new DOL rules only affect advice surrounding retirement savings (401ks and IRAs) not taxable investment accounts. "Just because you've signed a best interest contract with your retirement adviser does not mean that person will have your best interest in mind when you're talking about investments not in your retirement account," cautioned Jim Allen, who heads up capital markets policy in the Americas for the Chartered Financial Analysts Institute.

Confusion also stems from the use of the term "adviser." A registered investment adviser already operates under the best interest fiduciary standard by law, but broker-dealers, who may call themselves advisers, can operate under the less stringent "appropriateness" standard. "Most retail investors are not going to know what an 'adviser' is or what he does," observed Allen. "I've studied this for years, and it's still confusing to me," he admitted. Allen also advises that clients should ask their financial consultant which regulatory scheme they are currently bound by. "It's best knowing up front where your adviser is coming from" and understand potential conflicts of interest.

Paul Johnston, general counsel and corporate secretary at Minneapolis-based Thrivent Financial predicted that investor will see a "new level of disclosure and paperwork" as a result of the new regulations. Johnston suggested that any investor should ask his or her retirement adviser about how the firm plans to "come into compliance" with the regulations. He asserted that, while Thrivent has both registered investment advisers and a commission-based sales force, its culture as a nonprofit fraternal organization is already client-centric across the organization.

Congress had originally directed the Securities and Exchange Commission to align investment advice for both retirement and non-retirement accounts under the fiduciary standard back in 2010 when it passed the Dodd-Frank Act. But the SEC has yet to act so the DOL stepped in.

Critics have charged that imposing the new standard will increase costs, impose red tape and shut out smaller investors as brokers prohibited from selling profitable products that compensate them for their advice will shed some smaller clients. The Securities Industry and Financial Markets Associations and the U.S. Chamber of Commerce have opposed the regulations and, according to industry trade papers, are considering suing the DOL to block implementation.

Some industry observers have speculated that comments from Eugene Scalia, an attorney with a Washington law firm and the son of former Supreme Court justice Antonin Scalia, are likely to the be the basis for any future litigation. Scalia submitted a letter to the DOL complaining that their interpretation of a fiduciary is "vastly overbroad and impermissible." He also charged the DOL with overstepping its jurisdictional boundaries instead of letting the SEC set the standards.

The DOL pushed out final implementation until January 2018, so investors may not see any changes at all until more than a year from now. In addition, they softened the rules under certain conditions. For example, advisers to smaller 401(k) plans (fewer than 100 members) can be exempt from some of the restrictions and advisers can recommend a rollover from a 401(k) into an IRA that has higher fees if it is deemed in the best interest of the client.

Thrivent's Johnston cautioned that firms across the country are just beginning to digest the rules and specific changes are yet to be determined. "Anything you are hearing or reading regarding next steps is preliminary," he said.

Brad Allen is a freelance journalist and former investor relations executive for companies including Imation Corp. and Cray Research. His e-mail is brad@bdallen.com.