One of the thorniest issues--one laid bare by the Dodd-Frank law--in the wealth management and brokerage industry is whether advisors and brokers should be held to a fiduciary standard. Currently, registered investment advisers must meet that standard, which requires them to act in the best interests of clients and disclose conflicts. Traditional brokers are held to a suitability standard, which is generally seen as less onerous. This is a huge issue in the industry, with passions inflamed on all sides.

Traditional brokers certainly see it as an assault on their way of life, even though the Dodd-Frank law makes clear that charging a commission and offering proprietary products are not necessarily violations of the fiduciary standard and that the standard does require responsibility after a sale has been made.

Is a fiduciary standard fait accompli? Not necessarily. The Dodd-Frank reform law gives the SEC the authority to require a uniform standard on advisors and commission-dependent brokers, really anyone who provides retail advice. However, the agency must first conduct a six-month study examining the issues.

As Investment News notes, the agency aims to cast a wide net for comments. The SEC is upgrading the comment process beyond what is legally required; it has plans to establish email boxes on its Web site organized by topic, for example. The public comment period will remain open for 30 days after it is published in the Federal Register, which could come any day. The comment form is available here.

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