The SEC's action, supported by the broker-dealer industry but opposed by consumer and investor advocates as not going far enough, comes a year after regulators first proposed most of the changes included in the approved package.

In a 3-to-1 vote, commissioners approved the Regulation Best Interest, along with other regulatory actions intended to enhance disclosures and clarify certain advisors' existing responsibility to put their clients' interests before their own.

The Securities and Exchange Commission on Wednesday adopted a new regulation that calls for brokers to act in the best interest of their clients when making investment recommendations.

Regulation Best Interest will apply to investment recommendations, whether an individual stock or bond or a certain account type, such as a rollover individual retirement account.

Supporters of the rule say it will be an improvement over current standards for brokers, which only require them to make sure an investment is "suitable" for a client.

"While we have yet to fully review the final rule, what we heard during the [SEC's meeting] gives us hope that it will protect investors while also preserving investor choice and access to professional advice," said Dale Brown, president and CEO of the Financial Services Institute, an industry advocacy group.

Nevertheless, critics warn that it falls short of eliminating conflicts of interest — such as commission-based pay or other financial arrangements — that end up costing investors and lining the pockets of brokers.

"The obligation to act in the best interests of the customer in the regulation simply codifies the obligation to make recommendations that are 'consistent with the investor's best interests'" under the suitability standard, said Barbara Roper, director of investor protection for the Consumer Federation of America.

Compliance by broker-dealers will include making required disclosures and working to mitigate conflicts that could lead a broker to make a recommendation that is not in the client's best interest.

The rule also bans sales contests among broker-dealers, and requires brokers to consider the cost of an investment when determining whether it is in the best interest of the customer.

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Additionally, a so-called relationship summary form will be a required disclosure. It will include a variety of information such as the fees charged, services offered, conflicts of interest and whether the firm and its financial professionals have a history of legal or disciplinary actions.

Commissioners also adopted interpretations of existing law pertaining to the advisors that the SEC oversees and when investment advice can be considered "incidental" by a broker and not subject to additional regulation. Those two items will be effective once they are published in the Federal Register.

Regulation Best Interest and the new relationship summary form will become effective 60 days after they are published in the Federal Register, with a compliance date of June 30, 2020.

Meanwhile, the controversial "fiduciary rule," which was previously issued by the Labor Department and overturned last year in a legal challenge, could be revived in the coming months, according to the agency's regulatory agenda.

That rule would have required advisors who provide advice related to clients' retirement accounts such as IRAs to adhere to strict rules for putting clients' financial interests first. At this point, it's uncertain exactly what a new proposal would include and whether it would largely mirror the SEC's new regulatory actions.