July 21 not only marks the one year anniversary of the passage of the Dodd-Frank Act, but it’s also the date when the Securities and Exchange Commission (SEC) will turn its attention to crafting a fiduciary duty rule for brokers.

What’s the chance the SEC will not issue a fiduciary duty rule? There’s about a “one in one hundred chance [the SEC] does nothing,” said John Taft, CEO of RBC Wealth Management, during comments at the Securities Industry Financial Markets Association’s (SIFMA) Dodd-Frank Impact Analysis conference on Wednesday.

mary schapiroTaft, who also serves as chairman of SIFMA, was part of a panel discussion exploring Dodd-Frank’s impact on the individual investor, which primarily focused on the fiduciary duty rule for brokers that was mandated under Section 913 of Dodd-Frank and which SEC Chairman Mary Schapiro (left) has said the agency will begin writing after July 21.

The panelists–which included Taft; Charles Johnston, Vice Chairman of Morgan Stanley Smith Barney; Kathleen Murphy president of Personal Investing at Fidelity Investments; and Ben Plotkin, executive VP of Stifel Financial—made educated guesses as to what the final fiduciary duty rule will look like.

Taft said it’s important to note that the ’40 Act fiduciary standard that advisors must adhere to applies specifically to “discretionary investment advice.” If the SEC, he said, decides to “write a rule that imposes a fiduciary rule that [applies] to all personalized investment advice,” the agency will have to consider how to apply that fiduciary rule to activities that go beyond discretionary investment management—and into brokers’ suitability realm.

“A new [fiduciary] standard is what’s needed,” Taft said. “Rules that don’t exist today need to be written to understand how to apply that fiduciary standard to brokerage activities—which are many, varied and almost impossible to describe.”

Johnston of Morgan Stanley added that the SEC “must define” personalized investment services. He said that the ’40 Act fiduciary standard is “unworkable” for brokers, and that he believes regulators are “moving away” from applying that standard to brokers. However, he said, “there will be trade-offs” in terms of the types of disclosures that brokers will have to adhere to.

Johnston conceded that regulators—including the Department of Labor (DOL)—have a “tough job” in crafting a fiduciary standard for brokers and under the Employee Retirement Income Security Act (ERISA). “I give [regulators] a lot of credit because they’ve done a lot of listening. They get it and understand the issues.”

But Murphy with Fidelity added careful attention will have to made to how DOL and SEC craft their fiduciary rules, as there’s “no question that one impacts the other.” Any potential conflicts in the two agencies’ standards “have to be straightened out.”

On top of dealing with a new fiduciary mandate, and “potentially conflicting standards” in the DOL and SEC fiduciary rules, Murphy said, the Financial Industry Regulatory Authority (FINRA) “has put in place new suitability standards.”

Until the final fiduciary proposals are aired, all of the panelists agreed that a lot of uncertainty remains. Johnston with Morgan Stanley noted that because there are “so many uncertainties” surrounding a final fiduciary duty rule, it’s hard to prepare advisors for new guidelines. “There will just be a lot of hard work when [a final rule] comes out,” he said, and Morgan Stanley will have to “educate clients and advisors on how to work within the new rules.”

Johnston added that he’s noticed a trend among Morgan Stanley’s stable of 18,000 advisors over the last six months: the more experienced advisors are shifting their business to a fee-based advisory platform. “I’m not sure if [this shift] is in preparation for a fiduciary duty,” he said, “but it’s an interesting trend.”