Might this, in turn, help explain why the large industry brokers are making such strained arguments against the adoption of both a universal fiduciary standard on the part of the SEC and the new fiduciary rule by the DOL? It seems dual registration isn't a new business model, it's a transitionary business model. Individual brokers, once held captive by larger firms, are discovering, through their dual registration experience, they can unshackle themselves and become independent.

Do you think the large brokerage firms like this outcome? Of course not! Don't you think it would be in their continued interest to present a compelling story of the "high" cost of adopting a universal fiduciary standard? Sure! Are they afraid their best sellers may discover it's easier and more lucrative to go independent? You can bet on it!

Seen in this light, it obvious why the brokerage industry has attacked the fiduciary standard. It's also obvious why it's pushing FINRA as a replacement for the SEC when it comes to overseeing RIAs. These strategies are designed to dissuade their prime producers from leaving the farm. After all, if it weren't for these guys, the corporates wouldn't be getting those lush bonuses you always read about. 

Which leads to this question: Does eliminating dual registration resolve the fiduciary standard debate? And by "eliminating," I mean regulating industry titles. No longer will brokers get away with calling themselves "advisors" because they can't call themselves "advisers."

Think about it. Do we allow medical charlatans traipse around calling themselves "docters"? We've seen plenty of studies (that have never been refuted by the industry) showing the investing public is confused by these titles and the seemingly similar services offered by brokers and advisers. 

And, being the model capitalists we are, why would we ever want the government to preserve a business model, particular one headed into the ashbin of history? The brokerage industry has been dying a slow death ever since we deregulated commissions. It's time to let nature take its course.

Today, it seems like the dual registrant industry is too big to kill. But it's not too big to fail. Just look at the Merrill Rule's namesake. Eliminating dual registration will at least give the brokerage industry a fighting chance. It will force the industry to decide if it wants to survive or go the way of the dodo. Otherwise, in trying to regain a golden age that has long ago disappeared, the industry's top performers will decide for it, and, right now, that doesn't look too good.

Perhaps industry executives ought to watch Giant. In the end, despite his apparent riches, Jett Rink's self-destructive behavioral, which included clingingly hopelessly to the past, leads to his demise.