This week the Food and Drug Administration (FDA) came out with aseries of rather graphic pictures meant to dissuade folks fromsmoking. You may have seen them. If you did you’ll certainlyremember them. If you didn’t, well, I always write for the familyaudience and it just wouldn’t be appropriate for me to describethem. Suffice it to say, they include plenty of real life medicalafflictions. If you have a queasy stomach, don’t look at them. Anddon’t smoke, too.

It took about three generations for cigarette smoking to go from“therapeutic” to “life-threatening.” Despite the many scientificstudies showing its link to cancer, an assertive marketing campaignon the part of the tobacco industry and the associated politicalcampaign allied with it effectively thwarted early efforts. For along time, regular people just didn’t believe smoking could havebeen that bad. Even worse, when the final nail in the coffin (punintended) eventually did arrived, it didn’t come from hard science(as it should have), it came from a gaggle of trial attorneys.

Sound familiar? We are just now seeing evidence from academic studies suggesting the harm caused by thelack of a fiduciary standard. No doubt some smart researchersare working on similar projects – or are they? Most of thisresearch is funded by the DOL. What if these studies, in additionto supporting the fiduciary standard, also begin to show onlycertain fees (and not the most often cited fees) most hurt investorperformance? Will the DOL, who’s lately been on a kick to highlightfees, move its research dollars elsewhere?

It’s much more fun, however, to begin to imagine the DOL beingas aggressive as the FDA. What kind of pictures would it show?Would it show granny working at the grist mill while her retirementplan’s non-fiduciary adviser sips a Mai Tai at some Caribbeanpool-side bar? Or, how about this one: a worker running a furiouslyas a gerbil inside a spinning wheel, pumping more and more dollarsinto a retirement plan doomed to fail as non-fiduciary adviserssiphons off fees (one for you, two for me,.. one for you three forme…).

Will this imagery work? Maybe, maybe not, but something isneeded. A recent survey shows that just under 50% of investors would be“uncomfortable” with a fiduciary standard. Consider that for amoment. It’s like saying half the people in the world are“uncomfortable” with a cure for polio. Jonas Salk wouldn’t be theonly person to question the intelligence of that half of thepopulation. (Sure, you can make arguments about the need fordisease as a preventative measure against world overpopulation, butthat would be oh-so ’70s.)

This goes beyond a marketing problem for advocates of thefiduciary standard. No doubt much of this distrust stems from ageneral distrust (growing in recent years) of government. But eventhe distrust of government argument does not allow for the statusquo. We currently have two different sets of standards offering thesame (perceived) product to the same market. With or withoutgovernment distrust or market apathy, this situation is just notfair.

The business of trust – in the fiduciary sense – has beena social contract for almost eight full centuries. We haverelied on civil legislation to define the parameters within whichthis service can and ought to be delivered. Such regulation cameabout due to (at first) atrocities and (later) fraud committedagainst beneficiaries. If we don’t level the playing field andapply the 1940 Investment Advisers Act to all those offering (evenincidental) investment advice, we may as well scrap the whole thingand return to the wild west of the pre-Depression days.