WASHINGTON BUREAU — Senate financial services bill negotiators say they will respond Friday to a House offer on the fiduciary standard issue.

The House proposal, delivered late Wednesday, would give the U.S. Securities and Exchange Commission authority to impose a fiduciary standard on the sale of investment products by insurance agents and brokers, but only after a “preparatory” period.

Rep. Barney Frank, D-Mass., chairman of the House delegation to the conference committee responsible for ironing out the differences between the House and Senate versions of H.R. 4173, offered the compromise.

The fiduciary standard of care battle relates to the level of effort made to protect buyers of securities or other products. Today, investment advisors use a fiduciary standard of care, meaning that they are supposed to place the interests of the customer ahead of their own interests. Broker-dealers and life insurance agents affiliated with broker-dealers use a suitability standard, meaning that they must verify that a product sold to a consumer suits the needs of the consumer.

The House version of the fiduciary standard provision calls for the SEC to develop a rule that would extend the fiduciary standard to insurance agents and broker-dealers.

The Senate version of the provision, crafted by Sen. Tim Johnson, D-S.D., and Sen. Mike Crapo, R-Idaho, calls for the SEC to study the issue and report back to Congress in two years.

The SEC, consumer groups and the Obama administration have been supporting the House version, and insurance groups have been supporting the Senate version.

Sen. Christopher Dodd, D-Conn., Senate chairman of the conference committee, said Thursday that Johnson “will be prepared probably tomorrow to make an offer on that amendment.”

The National Association of Insurance and Financial Advisors, Falls Church, Va., declined to comment on Dodd’s statement.

In the past, Jill Edwards, a NAIFA lobbyist, has said that NAIFA’s chief outstanding concern about the House language is that House version continues to include a “best interest” standard, which would require a seller to act in the best interest of the buyer.

“The problem is what does ‘best’ mean?,” Edwards asked. “It has never been clearly defined.”