Over the last year, a friend of mine has been trying to convince me to move my financial assets.

I currently have a taxable investment account at Vanguard, and my portfolio consists of a mix that includes a domestic stock index fund, an international stock index fund, and tax-advantaged municipal bond funds. This friend believes that I should be approaching my investments somewhat differently.

He is a real estate broker, so he likes to think in terms of leverage. My asset level qualifies me for so-called private banking at most retail banks, and one of the things banks like to do for wealthier clients is hold onto their assets while offering special terms like reduced banking fees and great interest rates on a substantial line of credit.

Ive had no need for such things thus far, but there may come a time where I want to use leverage to invest in a business, so Ive been exploring the idea.

So far, Ive talked to two firms. The first was the one recommended by my friend, as he manages the assets of his wife, who is a member of a prominent family that has seen success through generations in New Jersey. Thats Merrill Lynch. The other is a branch of my local retail bank, Wells Fargo Advisors.

I spoke to both separately, and they both put together proposals. Wells Fargo presented me with a team of people ready to take over my banking, while the Merrill Lynch adviser initially thought my plan was solid. Both parties drew up a proposal for me, and the two were very different. I had a much longer initial discussion with Wells Fargo, so their proposal took into account my preference for low-cost index funds, at least partly.

Neither of these teams of advisers are financial planners. They are salespeople, or stockbrokers, or financial advisers, or investment advisers, and they have products to offer. People in these roles can go by any variety of names and can be misleading to customers.

The price I pay for these products, in addition to the fees baked into investments that eat into net investment results, is generally a 1% fee for assets they manage. There are certain times when paying 1% of a portfolios balance every year whether the portfolio gains or loses money could be like paying someones salary. Its far higher than the expense ratios embedded into my mutual funds.

In theory, even salespeople, whether they earn money from commissions, from kickbacks from fund managers, or from a combination of the two, should want to offer whats in the best interest of the client. If they dont, the client would leave, theoretically, and find a better salesperson. But Im not so sure this theory works out in practice. Given two roughly similar investments, wouldnt a salesperson want to offer the one that provides him with a little more income?

Legally, advisers must only sell investments that are appropriate for the investor based on the customers time horizon and risk tolerance. A financial planner, particularly one who is certified, is held to a different standard. A financial planner must give advice always with the customers interest in mind. Thats the fiduciary standard, and it would be the difference between a planner recommending a low-cost portfolio of index funds and an adviser or salesperson making decisions based on whats more lucrative for the firm.

President Obama wants to change the regulations so all financial advisers, everyone who works for a bank and offers advice on investment decisions, are held to this fiduciary standard. This probably has more of an effect on what happens when you call up your employers 401(k) plan sponsor to ask for investment advice.

Its clear why banks have no interest in adhering to a fiduciary standard. If stockbrokers were unable to sell all but the lowest-cost investments, it would change the entire nature of Wall Street. In order to stay in business, managers of active mutual funds would need to find a new way to sell their products. Banks would have to make up the income previously generated through incentives or kickbacks in other ways.

This is why the industry has reacted to the fiduciary standard proposal by claiming that the requested regulation would make it more difficult for the middle class to get financial advice. I dont necessarily think thats true. It might make investment sales at a bank less accessible to those without sufficient assets for the 1% fee to generate worthwhile revenue.

But thats not the financial advice most people should be seeking and I found that out when I attempted it myself. The middle class, whoever that may be the not wealthy, who may be dealing with a growing retirement investment account, a house, and maybe some additional taxable investments needs little in the way of investment sales and more in the way of basic financial planning advice. Maybe financial coaching.

Maybe theres a different solution. More retail banks could offer financial planning or coaching, where the employees abide by the fiduciary standard, much like independent Certified Financial Planners. The model must work because Vanguard offers this service to its customers; theres no reason why retail banks cant figure out how to make sure the same type of service would be profitable.

If customers really believe the best place to go for financial advice is their local retail banks, those institutions can do a better job of meeting those needs rather than just putting them in front of salespeople. If financial planners can stay in business independently, banks should be able to find a way to incorporate that type of service into their offerings.

Employers may want to follow this example, as well. When I worked for a financial company, a company whose own subsidiary managed employees 401(k) accounts, employees were encouraged to talk to a company-provided financial expert. It was never clear especially to me, thirteen years ago, before I knew about fiduciary standards and financial planners who I was talking to or how they determined their recommendations and advice.

When you walk into a car dealership, you know youre talking to a salesperson, and you know the goal of the salesperson is to sell you something. You also know that the salesperson has incentives to sell you cars, related products, and services that generate the most profit for the dealership.

For most customers, this isnt as clear when you enter a retail bank. For some reason, customers believe that bank employees want to help and are financial experts who offer advice. The proposal of new fiduciary standard regulations could make sure that customers can walk into a bank and get the real advice theyre seeking.

The fiduciary standard isnt a guarantee. As Walter Updegrave pointed out in a recent article for Money, an adviser and a client can never have completely aligned motivations. A financial planner would need to give advice that is in the best interest of his or her client, but must also be concerned about earning future business from each client, winning new clients, and staying in business.

No one, not even a fiduciary, can look out for yourself better than you.

And I understand that the general reaction to that fact is that we need to educate everyone more about managing their own finances, so they know to avoid brokers who try to sell customers whats in the companys best interest instead of whats best for the clients. But this is a message that doesnt get through completely, and especially not to the people who need to message the most.

Financial planners and coaches can keep trying to make it clear that theyre better resources for most people and we can continue pushing useless and harmful money management and financial literacy classes in high school, or we can make some industry changes to ensure that the professionals people are most likely to encounter when they need help are the right type of financial planners.

Im going to go back to the bank. I may eventually move my assets to the bank to take advantage of access to credit, but only if I can do so on my own terms, investing how I want to invest, with no additional fees.

Do you think all brokers and financial advisers should be held to a fiduciary standard?

Published or updated February 26, 2015. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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