"Financial advisors who are supposed to recommend the best products for clients needs are often paid by the product providers. ‘This creates an unhealthy focus among providers on designing products that sell [to advisors] rather than on products that clients need.’” That's according to Financial Times' journos Gillian Tett and Kate Burgess in a series of articles called, "the Future of Investing."
That, in just 41 words, is the argument for being a fee-only, fiduciary—where the fee is paid by the client. And yet the whole issue of turning every advisor, whether he be at a broker/dealer or at an RIA, into a fiduciary is turning out to be a vexing problem. B/ds have so many issues that complicate matters—investment banking relationships, proprietary trading issues and the like. For me, the answer is pretty simple: Anyone who calls himself a financial advisor should be a fiduciary. If you just want to broker the sale of stocks, bonds and mutual funds, just call yourself that, a broker.