WASHINGTON -- Even as the SEC is contemplating an expansion of fiduciary rules to include broker-dealers who operate in the retail space, some advocates argue that the regulatory interpretation of the responsibilities under a fiduciary standard has strayed from common-law precedent and become dangerously diluted.

Ron Rhoades, a CFP and an assistant business professor at Alfred State College in Alfred, N.Y., where he is curriculum coordinator of the financial planning program, worries that big brokerages and other heavy hitters representing the financial services industry wield an outsized influence in Washington that has defanged some of the investor protections traditionally associated with fiduciary duty.

"The federal fiduciary standard is under attack at the current time," Rhoades said Tuesday at an event hosted by the Institute for the Fiduciary Standard.

"We are in danger of seeing the term 'fiduciary' co-opted," he added. "What we have now is a fiduciary standard that looks like disclosure only. Well, if disclosure worked, there would be no need for a fiduciary standard."

Tuesday's symposium marked the 50th anniversary of the U.S. Supreme Court ruling in SEC v. Capital Gains Research Bureau, a case in which the high court held that investment advisors are indeed bound by fiduciary duties to their clients.

The event also recognized author Robert Monks, a former Labor Department official and the founder of Institutional Shareholder Services, among other businesses, as the recipient of the inaugural Frankel Fiduciary Prize. That honor, named for Boston University professor Tamar Frankel, aims "to acknowledge individuals who have made significant contributions to the preservation and advancement of fiduciary principles in public life," according to the advocacy group the Institute for the Fiduciary Standard.

The SEC has been considering expanding fiduciary responsibilities to broker-dealers under new authorities the agency gained under the Dodd-Frank Act. But progress has been slow, despite the assurances of Chairman Mary Jo White that a uniform fiduciary rulemaking is a high priority and the insistence of some industry leaders that a consistent standard is a commonsense regulation.

"If you're touching other people's money, you're a fiduciary," said John Bogle, founder of the Vanguard Group, who addressed the conference by telephone from Philadelphia. (Bogle had been scheduled to attend in person, but did not make the trip due to a snow storm that hit the mid-Atlantic.)

Robert Plaze, a former senior official at the SEC who today is a corporate partner at the law firm Strook & Strook & Lavan, believes that the lobbying clout of Wall Street and the internal politics within the agency make it unlikely that the SEC would ever enact tough, binding fiduciary rules for broker-dealers. He also takes issue with the wording of the relevant section of the Dodd-Frank Act.

Instead, he suggests a "third way," whereby the SEC could act under the more firmly established statutory authority found in the Exchange Act and compel brokers to make recommendations they believe to be in the best interests of their clients. That would borrow a central tenet of the fiduciary standard, but strip it of that politically freighted term, instead casting the rules in language that would be "very hard to object to."

"We call a truce and move on to helping investors," Plaze said.

Ralph Nader has a different idea. The famed consumer advocate did not weigh in on how the SEC should proceed with its fiduciary proposal, but instead outlined his vision for a campaign to fund full-time citizen watchdog organizations to monitor brokerages and banks and other corporate institutions for malfeasance.

Nader is appealing to activist shareholders and others who have made careers out of agitating and exposing corporate misdeeds to contribute 1% of their total net worth to fund the nonprofit groups, which he says need to be staffed with dedicated, full-time paid employees.

"Nothing ever happens unless people are at the ramparts to make it happen," Nader said. "It never goes very far unless someone is there."

Those groups, as Nader envisions them, would engage in a variety of campaigns to hold financial institutions accountable, including lobbying lawmakers and executive branch officials, taking their case to the public, and pursuing litigation.

Nader proposed a cap on individual contributions at $1 million, a parameter he suggests would be helpful in attracting ultra-wealthy activist investors like Carl Icahn, for whom even the 1% threshold would amount to a very large sum. Once $10 million is raised, Nader said he would launch the first watchdog organization.

And Nader is first in line. "I will pledge 1% of my financial net worth" for each of the next three years, Nader said. "It will come to about $50,000, for those of you who are curious."

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