The investment advice industry has been in anguish over the fiduciary vs. suitability debate as of late. The debate hit a milestone last week when the SEC released a study that recommended all advisors, whether traditional Series 7 broker or a registered investment advisor, be held to a common fiduciary standard. The study found that such a fiduciary duty would benefit all investors.

As of now, investors are unaware that investment advisers and broker dealers operate under different standards, the study noted. Traditional commission-only brokers are currently held to a suitability standard that does not offer as much protection, according to some, as a true fiduciary standard.

The SEC's study is hardly the final word. Dodd-Frank directed the SEC to conduct this study and gave the agency the right to make rules in this area. The intent of Dodd-Frank authors, many think, was to require brokers to be held to a higher standard.

I will stick to my prediction that we'll ultimately end up with standard that is called a fiduciary standard but is written in a way that will be palatable to the traditional wirehouses. The standard will have to tread carefully when it comes to commission brokers and proprietary products and the like.

For more:
- here's some perspective from Investment News

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