The Obama administration believes that various brokers are not properly watching out for their clients and are pushing risky and expensive investments in a rush for big commissions. An investor Susan Bernardo trusted her stockbroker but she ended up losing a fortune.

According to Bernardo, her broker David Harris gave suggestion to her to sell $400,000 worth of comparatively safe municipal bonds. She has also been advised to sink the proceeds into real estate and energy partnerships in expectation of receiving more income.

Bernardo got money from settlement after death of her husband and required money to raise her son. Those investments have turned problematic. As per financial planner who helped Bernardo file a claim against the broker, the stream of interest payments that has been used by her for living expenses has mostly dried up and the value of her portfolio has become half of what it was.

Bernardo said that her broker never notified her that how risky the new investments were. A proposed rule that will help to end the practice has been supported by the White House. According to experts, the new rule requires brokers to handle retirement accounts in order to put the interest of their clients ahead of their own.

Under the present rule, brokers are supposed to limit their suggestions to what is appropriate for clients based on their financial situation and appetite for risk. As per the experts, brokers don't have to provide cheaper alternatives or keep a look at the investments. According to critics, the present rule enables brokers to invest more of their clients' money in high-fee mutual funds that reduce returns over the years.