In the 1930s it occurred to a bunchof researchers that the stars and planets should have been pulled apart by their own mass. Since gravity alone couldn't keep the galaxies in place, they concluded an invisible substance called "cosmic glue" must be keeping them together. When the atom was split in the 1940s, the cosmic glue was identified as the "strong force," which keeps neutrons and protons happy together.

I've been thinking quite a bit about our regulatory environment. I am fairly certain that by the end of 2010, we financial advisors will have new guidelines for practicing our craft, which should serve as our own version of cosmic glue. The issues involve defining who is a fiduciary, when someone is acting in a fiduciary role and even the definition of fiduciary care itself.

A YOUNG PROFESSION

One of the reasons that this profession is so hard to define is that we're still in the nascent stages of development. Last year we celebrated the 40th birthday of the advent of financial planning. Forty years is nothing compared with the accounting and medical professions. And, because we've all come from different disciplines, how we practice differs greatly. Although we share a standardized process for financial planning, there is very little beyond the Investment Adviser's Act of 1940 that specifically directs us regarding how to conduct our businesses and our relationships with clients. We can call ourselves anything we want-financial advisor, financial planner, investment advisor, investment counselor, wealth manager.

When I started in this business, I called myself a financial planner. In 1984, Forbes magazine put a monkey in a three-piece suit on its front cover, with the tag line, "Anybody can call themselves a financial planner." It didn't take more than 30 seconds for me to find other ways to refer to my professional activities. I landed on the term "wealth manager" because my partner began using the phrase to describe how we gave institutional-level advice and support to our private clients. The way we describe ourselves, and the manner in which we manage our practices vary widely. We use different products and perform different services. We charge differently.

In my early days I had a Series 7 license. One day I was interviewed by a financial reporter who told me that her newspaper didn't want her to use commissioned advisors as sources because they didn't want to give the impression that they endorsed any products. She asked me if I knew any fee-only planners; I didn't. She didn't either. That's when I decided that, if the press was going to pave my way, I'd be an idiot not to be a fee-only planner. I am no more ethical than I was, but I find it easier to be treated professionally because of it. This is another aspect of our practices that seems to divide our profession.

Mark Twain said, "Man is the only animal that has the True Religion-several of them." Whatever our background and orientation toward our industry, we seem to think that individually, we have the only true way of practicing. And because our bad apples are so visible in the press, we wag our fingers and declare we've got the best business model, the best method of compensation, and the best client service and support.

THE FIDUCIARY FUNCTION

The fiduciary issue is just one more thing that divides us. Let's face it: The term fiduciary is a legal term, with very specific legal interpretations, which describes an ethical relationship of trust and confidence. Some advisors believe using the term simply opens us up to potential lawsuits. The suitability standard has served us well since 1934, they say, and we should leave it alone.

Tiburon's CEO Summit late last year featured a panel that consisted of three top litigation attorneys. These guys are in the business of suing advisors. They explained how advisors need to think about their relationships and activities with clients. They discussed the concept of "functional" fiduciary, which, in its simplest terms, means if it walks like a duck and looks like a duck, it's a duck. Just because we might not accept fiduciary responsibility in our relationships, does not mean we evade it.

A few years ago an SEC regulator, speaking at an industry event, described the components of fiduciary duty. The FPA adopted a version of this definition as its Standards of Care and outlines. In plain English, the fiduciary role in a financial planning engagement:

• Put the client's best interests first;

• Act with due care and in utmost good faith;