I’m not even through the first working day of the New Year and I’ve had my bubble burst already. This particular bubble is the optimism that the SEC will come out with a genuine, RIA-equivalent fiduciary standard for brokers on January 21. What with the holidays and the usual year-end workload, apparently I’ve fallen out of the loop on what’s been going on in Washington. My bad.

Imagine my surprise when I received a press release from the Committee for the Fiduciary Standard, detailing its opposition to the SEC recommending a “disclosure-based” standard for brokers. Say what? I couldn’t be more dumbfounded if you told me the Seattle Seahawks knocked the St. Louis Rams out of the playoffs (they did: 16 to 6).  No, not that the Committee opposes disclosures, I get that: disclosures haven’t worked for 70 years. But that the SEC is seriously considering disclosures as a substitute for fiduciary duty for brokers—how could this happen? And what happened to financial reform?

Now, don’t get me wrong, as you’ll read in my upcoming February column in IA magazine, I’ve kind of come around on disclosures: under some circumstances and with the right language, I’m beginning to see some consumer benefit to some disclosures. But that’s in addition to a fiduciary standard for brokers, not in lieu of one. For instance, if a fiduciary advisor feels a certain transaction involving a conflict of interest is still clearly the best alternative for a client, then accurately disclosing said conflict (along with the responsibility to ensure the transaction is truly in the client’s best interest) just might be the right thing for the client.

But that’s a long way from replacing a fiduciary standard with some disclosures. What happened to the Obama Administration’s mandate to “harmonize” the current confusing and conflicting muddle of advisor regulation with a fiduciary duty for brokers? What happened to the Dodd-Frank directive for the SEC to propose how such a fiduciary standard should be implemented? What happened to SEC chairman Mary Schapiro’s rhetoric over the past 18 months, such as when she told the Consumer Federation of America: “I believe that all securities professionals should be subject to the same fiduciary duty”?

According to Knut Rostad, founder and chairman of the Committee for the Fiduciary Standard, his recent meetings with the SEC have led him to the conclusion that a proposal for a disclosure-based standard for brokers is “a genuine possibility.” So much so that the Committee has sent a letter in opposition to such a standard, reminding Chairman Schapiro of her statements and referencing the body of research showing that, so far, disclosures have failed to protect the public. Knut fears that the SEC might even call the new standard a “fiduciary duty” even if it merely comprises disclosures of conflicts.

The good news is, I suppose, that the SEC hasn’t come out with any proposal yet. So there maybe time for clearer heads to prevail. But I have to admit, this news is more than disappointing. The use of vague and misleading disclosures to camouflage client-abusive practices is exactly the kind of baggage many of us feared Mary Schapiro would bring along from her years at FINRA. A disclosure-based standard for brokers would be an SEC seal of approval for Wall Street to keep on keeping on with business as usual.