It has long been debated in this industry whether commission-based advisors are doing what’s in the best interest of their clients, or simply piling them into the investments that gives them the most fees. Now the debate has gone national, with a new paper published by the National Bureau of Economic Research (NBER) on an audit by Consumer Financial Protection Bureau (CFPB).

The paper concludes that retail financial advisors tend to choose investments that will maximize their fees, particularly actively managed investments with higher expected fees. But there are several holes in this study, and in my opinion, it’s plain subjective and wrong.

The study was conducted by sending undercover auditors into financial advisors’ offices at banks, independent brokerages, and investment advisory firms. The paper argued that these advisors are usually paid on the fees they generate, not on AUM or the performance of the portfolio.

But is that even a safe assumption to begin with? Afterall, Registered Rep.’s 2012 Independent Broker/Dealer Report Card, a survey of these very independent brokers, found that asset-based fees account for 44 percent of their business, compared with 49 percent coming from commissions. Further, they expect asset-based fees to grow to 55 percent of their business in three years...

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(Read more from Staff Writer, Diana Britton on her blog, Yield of Dreams.)