The advice profession faces serious questions regarding their portrayal of staff members as "advisors" versus "salespeople," according to a new report.

At many broker-dealers, staff who are identified as financial advisors in marketing materials are described as little more than salespeople in legal filings, according to a recent report by the Consumer Federation of America (CFA).

The CFA compared how 25 major broker-dealer and insurance firms present themselves and their services on their websites to how they describe their services in their legal challenge to the Department of Labor’s fiduciary rulemaking. A longtime critic of the brokerage business, the CFA has been a staunch supporter of the DOL's fiduciary rule, which several appointees to the incoming Trump administration and member of Congrees have vowed to void.

In most cases, the CFA charged that broker-dealers used their websites to present themselves as providing fiduciary advice, as an enticement to potential clients. Yet when these broker-dealers participated in critical responses to the DOL rule filed by various trade organizations, they claimed that they were not engaged in any fiduciary relationships with their clients.

“It comes down to this: Are they financial advisors or are they just salespeople?” asked Barbara Roper, CFA director of investor protection and co-author of the report, in a released comment. “Put another way, are they lying to the court, or are they lying to their customers? The answer to that question has multibillion-dollar implications for millions of American workers and retirees who turn to financial professionals for help with their retirement investments.  After all, people expect salespeople to look out for their own interests and maximize profits, but advisors are expected to meet a higher standard.”

This isn't the first time the CFA has tried to paint brokerage firms in a negative, black-and-white light, financial professionals in both the RIA and B-D worlds argue. Brokers with securities licenses frequently offer advice that doesn't involve product sales, as do RIAs and other fiduciaries, they say.

Moreover, fiduciaries also face some of their own set of conflicts centering on asset management fees that aren't very different from the issues brokerages wrestle with. Even if the DOL rule survives in a Trump administration, these conflicts aren't going to disappear. Nonetheless, the CFA's claim that B-Ds were using securities laws to minimize their liabilities is accurate, according to brokers.

In “Financial Advisor or Investment Salesperson: Brokers and Insurers Want to Have it Both Ways,” which looks at the practices of the largest U.S. financial firms, salespeople were found to be functioning as investment advisors who must be legally held to a best-interest, conflict-free standard of advice, according to the authors.

On all of the broker-dealer websites, financial professionals are routinely referred to a “financial advisors” or they are given synonymous designations, according to the report. Nowhere are they referred to simply as sales representatives or agents, and the websites indicate that the professionals have the expertise that may be relied upon by less-sophisticated clients. According to the CFA, not one website referred to financial professionals as “salespeople.”

As of Aug. 24, the CFA found that several broker-dealers explicitly described their financial professionals as “financial advisors” on their websites, including Janney Montgomery Scott, D.A. Davidson, Stifel, Wells Fargo Advisors, HD Vest, Baird, Raymond James, Ameriprise, Edward Jones, BB&T Scott and Stringfellow, Chase, UBS, Morgan Stanley, Signator Investors, Lincoln Financial and VALIC.

Other firms had adopted variations of “financial advisor” that create a similar fiduciary impression, according to the CFA. For example, Schwab, Hilliard Lyons and Stephens all use “financial consultant” as a title for their professionals. Hilliard Lyons also designates its professionals as “chartered wealth advisors.” Voya uses the title “retirement consultant,” USAA uses “wealth manager” and Prudential uses the title “retirement counselor.”

Broker-dealer websites typically describe their services not as simply product sales, but as the provision of investment advice and retirement planning. The CFA was unable to identify any description of a broker-dealer serving as an arm’s length investment sales business.

In its report, the CFA pointed out that as recently as Aug. 24, the Wells Fargo Advisors website featured phrasing emphasizing “financial advisors” who offer clients a goals-based approach to holistic financial planning. At the same time, Schwab’s homepage advertised that its financial consultants would help consumers “create a plan” tailored to their needs.

The websites also included marketing messages intended to convince retirement savers that their advisor will be looking out for their best interest.

For example, Stifel’s “Statement of Commitment” to its clients pledged to put “the welfare of clients and community first.” On its “values” page, Raymond James not only promised that its professionals will “make decisions in the best interest of their clients,” it also stated “our clients always come first” in bold letters as the first element of its mission statement.

When the CFA analyzed filings challenging the DOL rule made by the U.S. Chamber of Commerce, the Financial Services Institute, the Financial Services Roundtable, the Insured Retirement Institute, the American Council of Life Insurers and the National Association of Insurance and Financial Advisors, they found a very different portrayal of broker-dealer business practices.

According to the trade organization filings, broker-dealer reps were “salespeople” engaging in activity “whose essence is sales.”

According to the report, many “transaction-based financial professionals” employed by broker-dealers and insurance companies present themselves as fiduciaries—“trusted advisors” who are required to act in their client’s best interest—however, clients cannot hold such “advisors” legally accountable for meeting that standard.

Such conflicts cost Americans $17 billion a year or more, according to the report.

The CFA  also cites a Public Investors Arbitration Bar Association study that found stark differences between the ways financial firms market their services—as advice given in the best interest of the client—and the defense these firms mount against customer claims in arbitration: that they only act as sales people who cannot be held to such stringent standards.

In light of the findings of the report, the CFA argues that broker-dealers and their representatives, by their own admission within their marketing materials, function as investment advice providers and not as salespeople as their lobbyists and attorneys often argue.

According to the CFA, the DOL fiduciary rule will apply an appropriate regulatory scrutiny to broker-dealers’ advisory activities.

“Financial professionals who act like retirement investment advisors should be held to an advice-based standard, and that’s what the DOL rule does,” said Micah Hauptman, CFA financial services counsel and co-author of the report. “Firms are sorely mistaken if they think they can continue the current charade in which they act like advisors to their customers while relying on their trade associations to argue the opposite in court in order to try to kill the DOL rule, they are sorely mistaken. People saving for retirement deserve to know where their advisor and the firm that their advisor works for stands on this issue.”