As federal regulators move ahead with a pair of rulemaking proceedings that could dramatically reshape the financial advisory industry, advocates of broader fiduciary responsibilities are urging advisors to make their voices heard in Washington.

The twin rulemakings come from the Securities and Exchange Commission, which has floated the idea of holding broker-dealers to the same fiduciary standard of care that guides the conduct of investment advisors, and the Department of Labor, which in the coming months is expected to issue a revised proposal for a rule that would extend fiduciary responsibilities to certain retirement plan advisors. Of the two, the Labor Department's proposed rulemaking is likely to materialize first, widely expected to be unveiled in July.

But that proposal, which will amount to a revision of the suggested rules the Labor Department offered in 2010, has come under intense opposition from some well-heeled industry groups. They have warned the rule could effectively eliminate the commission-based brokerage model and ultimately prompt financial professionals to withdraw from the retirement-plan market altogether.

Ron Rhoades, the program chair of the financial planning program at Alfred State College, counters that a sensible fiduciary standard could be a boon to the overall stability of the retirement system. Much of the lobbying to date, he argues, has amounted to scare tactics designed to shield big firms from more regulation.

"Once it is released, it's going to be attacked. It's already being attacked, even though nobody really knows exactly what the rule will be," Rhoades says. He urges advisors to get involved in the debate inside the Beltway to offer a counterpoint to "a lot of lobbying where they're basically going up and getting Congress to sign off on the letters they've written."

"I think it's incumbent upon the investment advisor community and the financial planning community to react to that, to put some of their lobbying efforts in support of the DoL rulemaking process, at least to the point of, let's get the rule out there. Let's see what it is, and then we'll comment on it. We don't want them to say we blanket endorse a rule we haven't seen, but let's get the rule out there and debate it," Rhoades says. "And it's also crucial to stress the importance of the fiduciary duty to the security of hundreds of millions of Americans who are trying to plan for retirement."

Meanwhile, the SEC recently announced that it was calling for more feedback on its proposal to implement a uniform fiduciary standard for advisors and broker-dealers. This will further delay another heavily lobbied debate where advisors could amplify their voices in support of stronger investor protections, according to Skip Schweiss, managing director of advisor advocacy and industry affairs at TD Ameritrade.

Although the fiduciary proceeding is in the hands of regulators at the SEC, the highly politicized nature of the debate argues for advisors to engage with their representatives in their home districts, Schweiss says, provided that they make it clear on whose behalf they are advocating. "Always advocate from the standpoint of the investor—the consumer," he says. "It shouldn't be about what's best for this part of the industry or this segment of the trade. It should be about what's best for the consumer. "

The SEC originally proposed implementing a uniform fiduciary standard in January 2011, but it tabled the measure as it was working through a cost-benefit analysis in an effort to gauge the potential effect of the regulation. But as a starting point, the agency should focus its study on the effects on the investing community, rather than the industry, says Blaine Aikin, president and CEO of advisor consultancy fi360.

"The reality of the situation is that the cost-benefit analysis that is appropriate in this situation is what are the costs and benefits to the investor. It's not what are the costs and benefits to the industry. I think sometimes that gets lost in the conversation," Aikin says.

The SEC has argued in favor of a uniform fiduciary standard by citing what it describes as widespread confusion throughout the investor community about the industry's nomenclature and the different standards that are imposed on professionals who to consumers all seem to be in the same business of providing financial advice. In part, that confusion has arisen from a growing tendency in the industry and the financial press to use the term "advisor" as a catch-all, paving over important distinctions in fiduciary standards and other nuances in the professions, according to Schweiss.

"I think we should be all looking at this through the lens of the consumer, and we have served to confuse the consumer more with each passing year by calling everybody advisors," he says.

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