I don't think the U.S. Court of Appeals decision striking down on March 30th the "Merrill Lynch rule" has gotten enough attention. It looks like the individual investor is the winner here.
The key term is "fiduciary duty." Briefly, the Investment Advisors Act of 1940, passed in the wake of the market scandals of the 1930s, said that an advisor had a fiduciary duty to disclose any conflicts of interest, must act in the exclusive interest of the client, and if a client believes they have been wronged, the client can sue. But the SEC had given certain broker-dealers exemption from the fiduciary requirement.
The Financial Planning Association and a number of other groups sued, arguing that the exemption gave brokers the ability to offer advisory services without adhering to fiduciary standards.
Here's Judge Rogers from the three panel ruling:
"A fundamental purpose, common to these statutes, was to substitute a
philosophy of full disclosure for the philosophy of caveat emptor, and
thus achieve a high standard of business ethics in the securities
industry... The IAA arose from a consensus between the industry and the
SEC that investment advisers could not completely perform their basic
function--furnishing to clients on a personal basis competent, unbiased
and continuous advice regarding the sound management of their
investments--unless all conflicts of interest between the investment
counsel and the client were removed."
Bottom line: The consumer should be better informed, get better information--and should have the ability to sue if an advisor doesn't live up to fiduciary standards. Not bad.