Even before the passage of Dodd-Frank, the battle to move Series 7 brokers to a fiduciary standard from the suitability standard has raged. Brokers pressed their point at the SIFMA conference that the move would be horrible on several grounds. They argue it would curtail choice among end investors, for one thing. Reuters notes one example put forth: Suppose a client sold his business .... If the client wanted to keep a large amount of stock in his company, would a financial adviser be obligated to tell him to diversify his holdings because it is safer?

Another argument is cost. There are some clients for whom a commission-based account is the most appropriate. A recent study held as much. But I don't think anyone believes the passage of a fiduciary standard would somehow require clients to shift to fee-based accounts.

All of this should be sorted out by the study Dodd-Frank directed the SEC to conduct within six months. The report is expected in January, and it will be wildly read.

This is a monumental issue in the brokerage and advisory industry. The mid-term election, which resulted in Republican control of the House, may end up offering some support for the Series 7 crowd, which has taken some lumps over the years but still has plenty of fight left in it.  

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