The old guard, Ron Kruszewski, CEO of Stifel Financial, a 125-year-old brokerage house in St. Louis, Mo., and the new guard, Scott Puritz, Managing Director of Rebalance, a robo advisory firm, sparred yesterday in the latest round of the fight over a newly proposed Department of Labor fiduciary rule aimed to protect retirement investors from conflicted advice. Their banter provides a snapshot into the complexities of a rulemaking that’s been five years in the making so far.

Is there room for both fee-based advisory and commission-based models under the proposed rules?

“We do not want to make the broker model impossible,” said Timothy Hauser, the DOL deputy assistant who led four-days of public hearings this week. “We agree not everybody needs an ongoing advisory relationship…. We just want to tamp down on conflicts.”

Kruszewski said the proposed rules would force his firm to migrate its commission-based clients who pay 50 basis points on average in annual fees to the firm’s more expensive advisory model where clients pay 107 basis points on average. “If we move brokerage accounts to non-conflicted advisory accounts, we will double what we will charge them; I think that’s lost in this discussion,” he said.

Puritz countered that retirement investors have a better option, signing up with investment innovators known as robo-advisors. He pitched his firm as well as Bill Harris’ Personal Capital; Vanguard and Schwab have similar offerings (Rebalance charges a flat 50 basis points annual fee for an endowment-style portfolio).

“Brokerage refugees” are seeking out the new model—for example, after learning that a “trusted retirement advisor” never disclosed extra fund level fees nor the fact that he did not have a fiduciary duty to put clients’ interests first, Puritz said. A common sales pitch: For one woman, her late dad’s broker recommended a new actively-managed mutual fund with a front-end load of 5% off the top. She was paying more than 3% in annual fees. Consider: A 1% extra annual fee can eat up 20% of your eventual retirement nest egg and reduce your retirement income by more than a third, according to the Center for Retirement Research at Boston College. For many, this is the difference between a sound retirement or not, Puritz said.

The problem the DOL is attempting to address is that current rules (issued in 1975) don’t ensure that all financial advisors act in the best interest of investors. It’s a real problem and a big problem: today the assets in 401(k) plans and Individual Retirement Accounts (under the regulatory purview of the DOL) exceed $14 trillion. Conflicted advice in these accounts tallies up to billions of dollars of investor losses, the DOL says.

Pretty much everyone professes to agree that a “best interest standard” is the goal but there are many ways to get there and many moving parts: disclosures, contracts, and exemptions. The DOL has been working on rules for five years.

In the meantime, it’s up to consumers to do their due diligence on fees, conflicts and whether their advisor (or that advisor’s firm) is getting ongoing commissions. If a financial advisor is a fiduciary, they are required to put the best interest of the client first. Brokers and insurance agents are usually held to a lesser standard—only that the investments they recommend be “suitable” for the client.

Still Kruszewski gave an example of how brokerage accounts work well for a retiree with a laddered bond portfolio in an IRA, for example. “If I have a bond account with $200,000, should I bring it to your firm?” Kruszewski asked Puritz. “No,” Puritz admitted. “It would be unsuitable,” Kruszewski said, adding that millions of investors are adequately served by the brokerage model.

“Our core philosophy is full and fair disclosure; we’re just not seeing that out of the brokerage community,” countered Puritz.

“I think the market is fair,” retorted Kruszewski, adding, “”If our brokerage clients want to look at your business model, they can.” (The pair shook hands and smiled on this point.)

Hauser closed the hearings thanking everyone who participated, including those who submitted comments, and called for more. “We are taking all of your comments into account, and you’ll see that it will make a difference,” he said. An archive of the public hearing webcasts and comments (2,606 and counting) are available here. The Kruszewski-Puritz panel was #21 out of 25 panels (a full agenda is here). Stifel Financial’s comments are here.