As the financial industry counts down to the anticipated release of the U.S. Department of Labor’s fiduciary rule on Wednesday morning, the rest of the world spins unaffected.

For registered investment advisors, who are already required to offer advice as fiduciaries, the sometimes fierce arguments surrounding the rule have occurred in a vacuum.

Most clients are blissfully unaware of the debate, said Scott Tucker, a dually registered advisor in Chicago. 

“I really haven’t heard anything except from a few prospects,” Tucker said. “Some of them are knowledgeable about it because their existing non-fiduciary advisor is doing workshops to tell them that they’re changing over to a fee-only process.”

Labor Secretary Thomas Perez will announce the final version of the fiduciary rule, which will establish a fiduciary standard for advice delivered on retirement accounts, at the Center for American Progress, according to recent reports.

Even though he operates as a fiduciary himself and argues that all advisors should act as one, Tucker is skeptical of the DOL’s rule.

“I think it’s well-intentioned, but it will end up being harmful to consumers,” Tucker said. “I think that the rule will create more compliance costs to advisors and thus increase costs to consumers.”

Tucker said that the new rule will force broker-dealers to either go out of business or change their business, which he laments as unfair because “there are a lot of perfectly good broker-dealers out there.”

But the decline of large broker-dealers can’t be attributed to pending federal regulation, said Derek Holman, managing director at EP Wealth Advisors in southern California. 

“This disruption has already been occurring,” Holman said. “Ten to 15 years ago, the RIAs and the independent channels were a small part of the business and as we’ve gained momentum we’ve brought down costs and more people have sought out unbiased advice. The industry has known for a long time that, ultimately, things had to change.”

Broker-dealers and hybrid RIAs should have already anticipated the impact of the rule, argued Chris Hamm, senior vice president at Independent Financial Partners, a hybrid RIA in Tampa, Fla.

“If you’re an RIA, you’re already well-prepared, or you should be,” Hamm said.

Hamm said that over the past few years, the percentage of his business's revenues derived from fees has gone from 40 percent to 65 percent.  

"The rule should push us further to the fee-based side,” he said.

At the Fidato Group, an RIA in Strongsville, Ohio, CEO Tony D’Amico wonders how the rule will impact advisors managing both qualified retirement accounts and brokerage accounts, and hybrids who offer insurance and annuity products as part of a comprehensive wealth management plan for retirement investors.

"It still isn't clear how this will work for someone who wants to be a fiduciary in one capacity, but who isn't going to be a fiduciary for a client's trust account or individually-owned account," D'Amico says. "What if they want a fiduciary for their comprehensive retirement plan, which not only includes investments but estate planning and insurance? There are good brokers out there with good intentions – but they are not required to put their client’s best interests first."

Dave Edwards, president of Heron Financial Group, an RIA in New York, thinks the rule will benefit RIAs and consumers initially, but could radically alter the RIA industry over the long term.

“I expect that a lot of hungry broker-dealers will shove themselves into the RIA space and rebrand themselves as RIAs,” Edwards said. “That will continue the process of fee compression."

He expects the pressure on fees created by the new rule, as well as continuing demands for better technology, will drive a lot of small practices out of business.

"I think that only firms with more than $1 billion in assets will be viable," he said. "There will be a lot of consolidation over the next five years.”

Tucker says that Americans with smaller account balances would suffer if the industry goes that way.

“I don’t see how proprietary robo-advisors could be considered as fiduciaries—how do Vanguard and Fidelity tell their robo-advisors to recommend their proprietary funds when there might be an alternative that better fits the client’s best interest?” Tucker said. “Without commission-based advice in the broker-dealer or captive agent world, I don’t see how those small account folks are going to get the benefit of advice.”

He is not alone in questioning the purported objectivity of low-cost robo advisors. Massachusetts Attorney General William Galvin has opened an investigation into the practices of robo advisors. Galvin has indicated he will evaluate their application to register in Massachusetts on a case by case basis.

Yet the debate over the rule has taken place in the absence of those account holders—and largely outside of the public consciousness, said Edwards.

“This has been a battle entirely behind closed doors, and that’s part of the reason it’s such an important debate,” Edwards said. “Previously, Mr. and Mrs. America didn’t know about the fiduciary standard until someone like me realizes they’ve been totally hosed by the costs of an investment. They’re largely oblivious. I don’t have any expectation that when this rule finally goes through, the public will notice any difference.”