Fiduciary matters are usually left to the trade press. But over the past year, this fairly staid topic has seen its share of time in the spotlight. The crux of the matter is whether or not to adopt the fiduciary standard of care across the board. This means an advisor would be required to put a client's interest above his or her own firm's, even if it means recommending products that generate smaller fees. This is in contrast to the much less stringent suitability standard under which many broker-dealers operate.

For his part, Blaine Aikin isn't quite sure what all the fuss is about. Aikin, president and chief executive officer of Fi360, which trains advisors in fiduciary affairs, believes the fiduciary standard serves clients best-much more so than the suitability or fair-dealing standard can ever hope to.

The federal government agrees. Last year's Dodd-Frank Wall Street Reform and Consumer Protection Act empowers the Securities and Exchange Commission to impose the fiduciary standard on brokers. Two recently released studies-one from the Government Accounting Office and one from the SEC-make the case as well.

We recently spoke to Aikin on the topic of what advisors need to know about acting as fiduciaries.

Q: Did the federal government arrive at the right decision about the fiduciary standard?

A: The fiduciary study was very well done, particularly the core focus of care. It makes it much more difficult to weaken the standard. Some advisors are dually registered (acting as both broker-dealers and advisors), but even there you've seen a migration toward the fiduciary approach. You will see a greater distinction between a personalized advice and brokerage.

Q: Does this strengthen the position of the SEC?

A: I think it's very unfortunate that the SEC is being assailed on the resource side. They are chronically underfunded. The political environment of budget cutting makes it all the more difficult for them to fulfill their obligations and the obligations empowered to them by Dodd-Frank.

Q: Will the Financial Industry Regulatory Authority (FINRA) take on a greater role?

A: FINRA has been very vocal about wanting to take on the role of being the self-regulatory organization and provide oversight. That would require a great change at FINRA. The organization has no history of regulating advisors other than those who are dually registered. But FINRA is the odds-on favorite organization of getting that role. It's probably the most politically expedient route.

Q: What other regulatory changes are there for fiduciaries?

A: The Department of Labor recently expanded the definition of fiduciary. What this will do is give added protection to retirement account holders. As more and more plan managers are held to the fiduciary standard, you're going to see improvements in the retirement products available, such as getting rid of many conflicts of interest in the way people get paid. This will drive down the costs of the retirement products.

Q: Outside of retirement plans, what kinds of product improvements do you expect to see if the fiduciary standard is adopted?

A: Annuities is the area that first comes to mind. This is where you'll see greater transparency in products. You'll see some of the compensation that is hidden in products become more transparent. Consequently, there will be more competition and prices on products may come down.