In a major departure from its past position, the brokerage industry is now behind the White House s plans to overhaul the way it does business. The industry s main trade group, the Securities Industry and Financial Markets Association (SIFMA) has agreed to let its brokers take on a fiduciary duty to clients. For years, the industry was happy that brokers had to recommend products that were suitable only based on an investor s age, investment goals and risk tolerance. By becoming fiduciaries, the broker would be obligated to put the interests of their clients first similar to what investment advisors do.

Analysts estimate it could be up to a year before legislation mandating the fiduciary switch winds its way through Congress and gets signed by President Obama. But with SIFMA behind the switch, the odds of a change happening have improved considerably, analysts say. If brokers do, indeed, become fiduciaries, here are some changes their customers could expect:

Right now, some brokers get a commission when their clients borrow money from the brokerage to invest, which is so-called investing on margin. But as fiduciaries, that broker might think twice about encouraging you to borrow more. Those commissions could be considered a conflict of interest if more debt isn t best for you, says Matt Bienfang, a brokerage analyst for TowerGroup.

2. Selling cheaper products.

Brokers often get paid more to sell their own firm s brand-name products, like a mutual fund, over comparable but cheaper outside products. If brokers adopt a fiduciary duty, however, and the products are comparable, the broker would have to recommend the cheaper option regardless of where it comes from. That could mean big hits to a brokerage s bottom line, which often makes the most money off the products it creates in house. The solution? Brokerages will sell cheaper products to compete, says Bienfang.

3. Scrapping commissions for fees.

Many brokers earn the majority of their income by making the sale, which is essentially getting a commission on the products they sell. A better way to compensate brokers, some analysts say, is to charge a flat percentage fee on a client s assets similar to what many financial planners do. That way, brokers make more money when their clients do, says Sean Cunniff, a brokerage analyst at TowerGroup.

4. Spending more time with clients.

For a fee-based broker to make money, the client has to stick around. Similar to mutual fund managers, fee-based brokers would be paid quarterly or annually rather than every time they sell a product. That could mean keeping clients happy by talking to them more regularly. Commissions-based brokers might not have to talk to the client for a year, says Bienfang. But if I m fee-based, I need to be more engaged because I m not making my money up-front, he says.

5. Less fine print, paperwork and confusion.

Under the current rules, brokers make their clients read a lot, and much of it involves legal language and hard-to-follow disclosure statements. Worse, sometimes even after all that reading, clients are still confused about knowing where to turn if something goes wrong. Brokers can be under the jurisdiction of one regulator for one product but answer to an entirely different regulator for something else. A fiduciary duty designation should clean all that up, says Bienfang, because brokers would have one higher standard to follow. That hopefully could mean clients and brokers would have less legal language to navigate.