Ken Fisher, CEO ofFisher Investments argues that the word “advisor” should be “bannedentirely.”

In rewriting advice rules for brokers, the Securities and ExchangeCommission should “ban entirely” their use of the term “advisor,”and require those who work within the financial services profession to “accuratelydescribe their role,” said Ken Fisher, founder and CEO of FisherInvestments.

In his July 31 comment letter to the agency on its three-prongedadvice standards package, Fisher argues that the brokerage andadvisory businesses “need clear, separate words to describe them,”as was intended by the Securities Exchange Act of 1934 governingbrokers and the Investment Advisers Act of 1940.

Related: There's a difference between 'adviser' and'advisor'

Fisher argues that the word “advisor” should be “bannedentirely,” as “requiring actors within the financial servicesindustry to accurately describe their role is common sense and goodpublic policy.”

Over the last few decades, Fisher told the Commission, “brokershave intentionally blurred these [advisor/broker] distinctions bycalling themselves 'advisors' and by offering more and moreinvestment advice. The result is investor confusion.”

In separate comments to ThinkAdvisor on Monday, Fisher said that“adviser” reflects the use of the term in the Advisers Act, whileadvisor with an “o,” was introduced by brokers “as a way to getaround the original ban on using the word 'adviser.'”

Said Fisher: “I remember a time very well when the 'o' didn'texist at all, and Series 7 registered folks couldn't callthemselves 'advisers' and were banned from that. The 'o' wasjust part of the flim-flam to get around that.”

Through “broker pressure and common media misusage much ofthe industry, your publication included, fell hook, line and sinkerfor the 'o',” Fisher said. (ThinkAdvisor contains the contentof Investment Advisor magazine.)

Fisher states in his comment letter to the SEC that while it isimportant for brokers to operate under “standards of conduct thatprotect investors, any further blurring, even if called'harmonization' or branded with another catchy slogan, will onlymagnify the problem.”

Instead, he argued, the financial advice industry needs“'disharmonization'”—“clear, bright, red lines so investors knowexactly what they are getting. Advisers versus Advisors language isa start.”

In particular, Fisher continues, “prohibiting brokers and theirrepresentatives from calling themselves 'advisers' or 'advisors' isa good first step.”

But he still doesn't think it goes far enough.

The Commission should “rule that only investment advisers notalso registered as brokers are permitted to call themselves'advisers.'”

Brokers should be required to call themselves “brokers,” Fisherargues, while “insurance producers, financial planners, and anyoneelse who may want to give investment advice, should likewise beprohibited from referring to themselves as 'advisers.'”

“Adviser” won't be eliminated because that's how it's spelled inthe Investment Advisers Act, Fisher told ThinkAdvisor. “'Advisor'and 'adviser' is an obvious confusion.”

Thus, Fisher says he's is partial to the terms: Broker,Adviser and Broker-Adviser (for dual-registrants).

“But other realms could be created,” hesaid. “The point is simplicity and clarity.”

He added, “As it is, few investors as apercent of all investors have a clue what and who they' re dealingwith in a registration and legal sense. Sticking close to theletter of the law isn't a bad idea.”

Regulation Best Interest “all wrong”

As the SEC acknowledges, “investors are confused, thinking theirbrokers are investment advisers acting with their best interests inmind, contrary to reality,” Fisher states.

But the proposed Reg BI solution “is to adjust the wording thatdescribes the duties the broker owes to an investor, whileexpressly stating that their intent is to not change therelationships that currently exist. This is all wrong. Some ofthese relationships need to be changed,” Fisher argued.

Applying a best interest standard to brokers “iscounterproductive,” Fisher said, as it “will further confuse bymaking it harder to differentiate between brokers and investmentadvisers. If the underlying problem is boundary confusion, changingthe wording of the duty a broker owes to an investor does notaddress the problem. It certainly does not address the fundamentalfinancial incentives tied to compensation.”

What's the right way to solve the investor confusionproblem?

The SEC should instead “enforce the boundaries” set out in theAdvisers Act.

“Specifically, any investment advice given by a broker not alsoregistered as an investment adviser must be 'solely incidental' tothe broker's brokerage activities,” Fisher wrote.

“I urge the Commission to begin strictly enforcing the 'solelyincidental' language in the Advisers Act, like a parent starting tostrictly enforce bedtime after a long summer vacation, which forthe brokerage industry has lasted for more than two decades,” hewrote.