Over the last few decades, Fisher told the Commission, “brokers have intentionally blurred these [advisor/broker] distinctions by calling themselves 'advisors' and by offering more and more investment advice. The result is investor confusion.”

In separate comments to ThinkAdvisor on Monday, Fisher said that “adviser” reflects the use of the term in the Advisers Act, while advisor with an “o,” was introduced by brokers “as a way to get around the original ban on using the word 'adviser.'”

Said Fisher: “I remember a time very well when the 'o' didn't exist at all, and Series 7 registered folks couldn't call themselves 'advisers' and were banned from that. The 'o' was just part of the flim-flam to get around that.”

Through “broker pressure and common media misusage much of the industry, your publication included, fell hook, line and sinker for the 'o',” Fisher said. (ThinkAdvisor contains the content of Investment Advisor magazine.)

Fisher states in his comment letter to the SEC that while it is important for brokers to operate under “standards of conduct that protect investors, any further blurring, even if called 'harmonization' or branded with another catchy slogan, will only magnify the problem.”

Instead, he argued, the financial advice industry needs “'disharmonization'”—“clear, bright, red lines so investors know exactly what they are getting. Advisers versus Advisors language is a start.”

In particular, Fisher continues, “prohibiting brokers and their representatives from calling themselves 'advisers' or 'advisors' is a good first step.”

But he still doesn't think it goes far enough.

The Commission should “rule that only investment advisers not also registered as brokers are permitted to call themselves 'advisers.'”

Brokers should be required to call themselves “brokers,” Fisher argues, while “insurance producers, financial planners, and anyone else who may want to give investment advice, should likewise be prohibited from referring to themselves as 'advisers.'”

“Adviser” won't be eliminated because that's how it's spelled in the Investment Advisers Act, Fisher told ThinkAdvisor. “'Advisor' and 'adviser' is an obvious confusion.”

Thus, Fisher says he's is partial to the terms: Broker, Adviser and Broker-Adviser (for dual-registrants).

“But other realms could be created,” he said. “The point is simplicity and clarity.”

He added, “As it is, few investors as a percent of all investors have a clue what and who they' re dealing with in a registration and legal sense. Sticking close to the letter of the law isn't a bad idea.”

Regulation Best Interest “all wrong”

As the SEC acknowledges, “investors are confused, thinking their brokers are investment advisers acting with their best interests in mind, contrary to reality,” Fisher states.

But the proposed Reg BI solution “is to adjust the wording that describes the duties the broker owes to an investor, while expressly stating that their intent is to not change the relationships that currently exist. This is all wrong. Some of these relationships need to be changed,” Fisher argued.

Applying a best interest standard to brokers “is counterproductive,” Fisher said, as it “will further confuse by making it harder to differentiate between brokers and investment advisers. If the underlying problem is boundary confusion, changing the wording of the duty a broker owes to an investor does not address the problem. It certainly does not address the fundamental financial incentives tied to compensation.”

What's the right way to solve the investor confusion problem?

The SEC should instead “enforce the boundaries” set out in the Advisers Act.

“Specifically, any investment advice given by a broker not also registered as an investment adviser must be 'solely incidental' to the broker's brokerage activities,” Fisher wrote.

“I urge the Commission to begin strictly enforcing the 'solely incidental' language in the Advisers Act, like a parent starting to strictly enforce bedtime after a long summer vacation, which for the brokerage industry has lasted for more than two decades,” he wrote.