WASHINGTON BUREAU — Producer groups are hoping they still have time to keep Sen. Christopher Dodd from calling for financial services broker-dealers to conform to the same standard of care that applies to investment advisors.

Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, apparently will wait until next week to unveil his new financial services reform legislation.

Dodd is waiting because Sen. Richard Shelby, R-Ala., the highest-ranking Republican on the committee, has rejoined talks aimed at crafting a bipartisan financial services reform package.

Dodd has already been working on a package with Sen. Robert Corker, R-Tenn. Earlier, Dodd had said he would release that package this week, and that a markup of the legislation would take place during the first week of March.

One controversial section of a draft that Dodd released in December 2009 would create a universal fiduciary standard for the sale of investment products to customers.

Life insurance agents, who often have broker-dealer arrangements that limit them to selling the products of one company, or several companies, have worried that they have no practical way of meeting a fiduciary standard.

Today, the law requires only that broker-dealers verify that a product sold to a consumer appears to suit the needs of that consumer.

Sen. Timothy Johnson, D-S.D., has circulated a draft amendment that would respond to agents’ concerns by replacing the universal fiduciary standard provision with a provision requiring the U.S. Securities and Exchange Commission to conduct a detailed study of the issue before implementing a new standard.

The SEC could draft new rules only if it could show that the new rules were needed to address “regulatory gaps and overlaps in existing rules that the study identified.

Thomas Curry, president of the National Association of Insurance and Financial Advisors, Falls Church, Va., has scoffed at the universal fiduciary standard proposal.

The current suitability standard that now governs transactions between broker-dealers and their customers “includes detailed and heavily enforced [Financial Industry Regulatory Authority] consumer protection rules,” Curry has written in a commentary on the issue.

“Suffice it to say, the fiduciary standard did nothing to protect” the clients of Bernard Madoff, Curry writes.

Madoff, once a respected investment advisor, is now serving a 150-year sentence for cheating hundreds of investors out of billions of dollars.

Laurence Barton, president of the American College, Bryn Marr, Pa., has written to Senate Banking Committee members to recommend that they focus first on reducing systemic risk in the financial system and return later to the fiduciary standard issue.

“Based on our broad experience across multiple segments of the industry, we can tell you that ensuring high standards that truly meet the public’s needs – especially those of middle-market Americans – is never as simplistic as the public rhetoric over regulation of investment advisers and broker-dealers would suggest,” Barton writes in the letter.

Backers of a universal fiduciary standard often quote a 2008 study by analysts at RAND Corp., Santa Monica, Calif., who found that many consumers are confused by the different rules that apply to investment advisors and broker-dealers.

The RAND report “did not assess the effectiveness of investment adviser or broker-dealer oversight, nor did it propose legislative or regulatory changes, but merely identified that some consumers may be confused about the terms “broker” and “investment adviser” and the legal differences between them,” Barton writes.

The RAND analysts found that consumers generally are happy with their financial services providers, Barton writes.