W. Hardy Callcott said it best: “There are a lot of cops on the beat policing the brokerage model.”

Yet, he pointed out there is still too much non-compliance with the rules. And much of that rulebreaking isn’t merely a technical misstep here and there, but “straight-out fraud violations," he said.

Callcott, a partner in the financial services and broker-dealer department at law firm Bingham McCutchen made this pronouncement earlier this week at a panel the firm held to discuss the harmonization of investment-adviser and broker-dealer regulation.

The SEC is now conducting its study on the fiduciary/suitability debate and most of the experts and interested parties believe that one standard will be created. Several issues have yet to be decided including how the cost and availability of investment advice; whether a broker can give personalized advice under a fiduciary standard and then step back and merely be a broker under the suitability standard for the same client.

At the Bingham McCutchen panel, even participant, David Tittsworth, an advocate of bringing all advisors under the fiduciary standard, said that the Securities and Exchange Commission doesn’t have enough resources to police the growing investment adviser industry. Tittsworth, executive director of the Investment Adviser Association, a not-for-profit organization that exclusively represents the interests of SEC-registered investment adviser firms, noted that were 7,000 such advisers just nine years ago.

Now there are 11,000 and the SEC has the same 450 examiners to scrutinize the field, Tittsworth said. But, the Dodd-Frank financial reform legislation will double those resources, he said. And, some 4,000 of those advisors will shift over to state regulator supervision from SEC oversight.

Whether you are an investment adviser or an advisor under a broker-dealer, Tittsworth said, both are comprehensively regulated. “We’re not saying brokers should be a fiduciary in all situations, only when investment advice is given.” And, he said: “It isn’t that one is bad and one is good.”

However, much of the media coverage doesn’t make it appear that way. Investor groups consistently crow about the higher standard of care under the fiduciary label under which investment advisers operate. The suitability standard that brokers rely on has been, for all intents and purposes, belittled in investor circles.

Studies, such as the Rand Report of several years ago, cited confusion among investors over what standard their particular advisor came under in different circumstances. But, Tittsworth countered for the advisors themselves. “The idea that it is so squishy that no one understands it is erroneous,” he said.