Both supporters and opponents of a fiduciary standard on sales of investment products have stepped up lobbying for their positions amid signs the Senate Banking Committee could unveil bipartisan financial services reform legislation as early as this week.

Several insurance industry trade groups view the issue as a make-or-break one.

For example, in a recent statement, Thomas Currey, president of the National Association of Insurance and Financial Advisors, said that “while the stated intention of these changes is to help consumers, in our extensive experience, they likely will have the opposite effect.”

Specifically, as defined by NAIFA and other insurance agent trade groups, the proposal would expand the application of the Investment Advisors Act to require all broker-dealers, “except for mere order takers,” to also become registered and regulated as investment advisers.

Doing so, Currey argues, “would subject broker-dealers to the Investment Advisor Act’s “fiduciary standard” based on the “praiseworthy but vague standard that an investment advisor acts in the customer’s ‘best interest.’”

The differing views come against the background of signs that Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, will unveil a bipartisan financial services reform legislation bill this week.

That is because Sen. Richard Shelby, R-Ala., ranking minority member of the committee, has apparently rejoined talks aimed at crafting a bipartisan package. Earlier, Dodd had said he would release the legislation he is working on with Sen. Bob Corker, R-Tenn., near the end of February and that a markup of the legislation would take place the first week of March.

Now, Dodd says his goal is a draft of the bill this week, with a markup of the legislation the week of March 11.

The committee has been focused on more controversial issues in the legislation, such as the authority of a proposed Consumer Financial Protection Agency, the authority of the Federal Reserve Board to oversee systemic risk, and the general authority of federal banking regulators.

What authority federal regulators will have over the insurance industry is another issue that remains unclear.

But life insurance agents are most concerned about the fiduciary standard issue. Industry trade groups are united on the issue. While NAIFA has taken the lead, the Association for Advanced Life Underwriting and the National Association of Independent Life Brokerage Agencies are also involved. The American Council of Life Insurers is also lobbying the issue strongly, if behind the scenes.

But, a proposed amendment circulated among committee members by Sen. Tim Johnson, D-N.D., is generating an angry response from supporters of the fiduciary standard, led by consumer groups and investment advisors.

Specifically, the language in the proposed amendment calls for the Securities and Exchange Commission to undertake a study designed to determine appropriate obligations of brokers, dealers, investment advisors, and their associated persons relating to the provision of personalized investment advice about securities to retail customers.

Under this amendment, the SEC would be required to provide a report to Congress within 18 months. The amendment would also give the agency the authority to impose new rules dealing with the issue based on its findings.

But, under the amendment, the SEC would be allowed to impose new rules only if they addressed “regulatory gaps and overlaps in existing rules” that the study identified.

A spokesman for Johnson cautioned that his amendment might not be offered, and is just part of an effort by the committee to find common ground on the issue.

But consumer groups and investment advisers insist that the fiduciary standard is the way to go. They are led by the Consumer Federation of America and Americans for Financial Reform.

In a recent letter to the committee, the two groups, as well as a large number of other consumer advocacy groups, argued that, “…in proposing a new study, the amendment gives scant attention to the issue of what investor protections should apply in these circumstances.”

The letter added, “To the degree that it raises the issue at all-carefully avoiding the words ‘fiduciary duty’-it devotes more attention to the impact on brokers than to the impact on investors.

“The only investor ‘concerns’ to be addressed by the proposed study are taken directly from misleading industry talking points, which self-servingly suggest that raising the standard for brokers would result in increased costs or reduced investor choice,” the letter said. “But we have several decades of experience from the financial planning industry to tell us that combining a fiduciary duty for advice with product sales to implement recommendations has no such ill effects.

“On the contrary, investors stand to see costs reduced dramatically if brokers are required, as they would be under a fiduciary duty, to take costs into account when making recommendations,” the letter said.

“The only products that would lose access under this approach are those that cannot be sold under a ‘best interests of the client’ standard.”

A spokesman for Johnson said that no decision has been made “as to what any final amendment” on the issue will look like.

Jeff Gohringer, the spokesman, said the amendment is only a working draft.

“There is no question that a solution needs to be found to put an end to the current confusion that exists between the standard of care imposed on broker-dealers and financial advisers,” he said. “The disagreement is over what needs to be done, and Sen. Johnson is just searching for some common ground.”