While most of the talk in Washington centers on health care and Afghanistan, there is a considerable amount of energy focused on financial reform to prevent another “market meltdown” we have seen over the last couple of years.

One piece of the debate is how to regulate advisors, brokers and planners.  Each currently has a different set of rules covering their behavior towards clients.  Brokers are held to a suitability standard which means they need to have a reasonable basis for the recommendation and “know their client.”  Additionally their  advice should be “incidental” to the transaction.   However, Advisors registered with the Securities and Exchange condition are held to a higher “fiduciary” standard that entails the advice be prudent and in the interest of the client.   This topic can be somewhat arcane, but a recent WSJ video does a nice job of pointing out the key differences.

http://link.brightcove.com/services/player/bcpid452319854?bctid=51077511001

Watch for more as congress debates on how best to regulate the advice providers.