A U.S. government proposal to extend a best-interests standard to advisors providing retirement advice may hamper the sales of more complex, higher-fee products, according to report from New York City-based Fitch Ratings published on Tuesday.

The U.S. Department of Labor’s April 21 fiduciary proposals promote a new best-interests standard that provides protections to investors for retirement accounts and annuities.

The proposals would extend to retail advisors those rules designed to ensure that pension trustees and plan sponsors put clients’ interests first. They would also require life insurers and asset managers to enhance conflict-risk management, publicly disclose fee practices and provide enhanced disclosures of compliance to regulators.

If the measures are adopted, they “could drive significant revamps of business practices” for both independent advisors and broker/dealer reps, says Fitch in the report.

The proposals raise the risk of either regulatory enforcement or litigation that would likely force advisors to “do more to prove that a client’s product choices indeed meet the individual’s best interests,” Fitch adds

The new proposals could also curb the willingness of reps to promote complex and higher-fee products, Fitch suggests. It adds that asset managers and insurance companies would also have to examine their distribution policies and commission structures for both independent and affiliated distributors that sell investment products destined for retirement accounts.

“Limitations on commission structures could have a disproportionate impact on the sale or fee structures of investment and retirement products sold in the middle market which generally tends to have more fee-sensitive customers,” the Fitch report says. “Effectively, the rules may encourage some brokers to adopt advice-for-fee models for their advisors as a means of compensating them for the compression (or elimination) of their commissions.”

Annuities could see their fees pressured or their commissions reduced in an environment of greater scrutiny, adds Fitch: “Adding to the challenge is the complexity of annuities, with guarantees that are difficult to value. Obtaining affirmations from clients that all features of any complex product are understood could become more common, but also burden the sales process and hurt volumes.”

Recent regulatory overhauls in the retirement markets in the U.K., Germany and Australia have included complete commission bans without leading to significant declines in sales, Fitch notes.

These proposals would not be fully implemented until the third quarter of 2016 at the earliest, Fitch says, noting that the comment period on the proposals closes on July 21.