It looks like the wirehouse community is now taking the prospect of universal fiduciary duty seriously enough that some reps are adopting fee-based compensation models now.
Charles Johnston, vice chairman of Morgan Stanley, says that an "interesting trend" has emerged over the course of 2011 as more of his people move their accounts to the firm's advisory platform.
He suspects the migration is motivated by a sense that "the world's going to change" when -- not if -- the SEC mandates that advisors in the commission-driven channel need to treat their clients with fiduciary levels of care.
That shift could start coming in the next few weeks, since the SEC has promised action on the issue as early as later this month.
It might be ironic that Johnston says his reps are looking for a more stable regulatory environment by moving to the RIA side of the business.
After all, it's the RIAs who are still wondering who's going to regulate them next year, much less what shape that supervisory framework will take.
Johnston made his comments at SIFMA's regulatory conference this week.
RBC Wealth Management CEO John Taft confirmed that there's a sense in the wirehouse that shifting to fees is now a regulatory "safe harbor" and "the simplest thing to do" in order to manage re-regulation risk.
SIFMA's position is that if too many brokers shift to fee-based models, middle-market investors will have to pay more money for advice.