The DOL proposal's limited scope would lead to investor confusion, and result in "regulatory duplication and inefficiency," according to language in SIFMA's proposal.

Instead, SIFMA wants a uniform fiduciary standard applied to all retail brokerage accounts.

READ: Fiduciary rule elicits mixed reactions

SIFMA also wants to wait for the Securities and Exchange Commission to establish its own rule, which Secretary Mary Jo White has announced the agency would do, albeit at a pace expected to be much slower than the track the DOL's proposal is on.

"Any consideration by the DOL to adopt a best interests standard should be consistent with a prospective FINRA/SEC standard," according to SIFMA's proposal.

The trade group, which lobbies on behalf of the broker/dealer industry, says its proposed rules-based uniform standard would include robust disclosure requirements and heightened exams and oversight by the SEC, FINRA and state securities regulators, and would allow for "private right of action for investors," according to the proposal.

Opposition to the DOL's proposal is congealing around the Best Interest Contract Exemption provision, which would allow advisors to IRAs and 401(k) plans the ability to receive commissions so long as those payments were fully disclosed in the contracts, which would also clearly articulate advisors' obligation to act in the best interest of investors.

Robert Ketchum, Finra's CEO, recently said those contracts are wrought with "practical" concerns, namely that enforcement of the DOL's rule would ultimately be left to class action claims and arbitration hearings.

That reality would result in courts and arbitration panels prohibiting investments with higher costs, thinks Ketchum.

"I suspect a judicial arbiter might draw a sharp line prohibiting most products with higher financial incentives no matter how sound the recommendation might be," Ketchum said.

SIFMA's new rule amounts to an amendment of existing Finra rules governing broker/dealers conflicts of interests.

Specifically, the "suitability" standard of care that governs brokers, and which is widely considered a lower threshold of care than a fiduciary standard, would be replaced by a new Best Interests of the Customer Standard.

That standard would be based on a "prudent person" benchmark, similar to the fiduciary standard language in ERISA and trust law.

But SIFMA's proposal specifically says the sale of proprietary investment products "shall not be considered a violation of this standard," according to the proposal.

Fees investors pay would be "reasonable" and fully disclosed, but SIFMA's proposal goes so far as to state that it would not require advisors to recommend the least expensive investment alternatives.

Conflicts of interest would have to be disclosed when customers open an account and prior to an investment transaction, and an annual summary of fees would be required.