The U.S. Securities and Exchange Commission might be one step closer this week to untangling the confusing and conflicting rules about who provides financial advice and which standards they should be held to—but there’s still a long way to go.

Nearly eight years after the Dodd-Frank Act gave the SEC authority to craft stricter standards for broker conduct, the agency has proposed its own rules, with mixed but generally positive response from the financial services industry.

“The proposals, as discussed by the SEC, appear to be a step forward for investors,” wrote the generally pro-fiduciary Financial Planning Coalition in a statement. “We appreciate the opportunity to comment on these proposals and will make recommendations to strengthen them in keeping with what consumers expect and deserve—a fiduciary standard requiring financial professionals to put their clients’ interests first when providing financial advice.”

By a vote of 4 to 1, the SEC on Wednesday evening chose to release proposals for a “Best Interest Standard of Conduct” for broker-dealers and an “Adviser Standard of Conduct” for financial advisors. The proposals now go to the public for a 90-day comment period.

The proposals are laid out in a 1,000-page plan, with 1,800 pages of footnotes. Many advisors, fiduciary advocates, industry organizations and securities attorneys are just now poring through the documents.

Many of the SEC commissioners expressed lukewarm support for the proposal. The one who rejected it, Commissioner Kara Stein, a Democrat, argued that the proposed regulations were a toothless compromise next to the now-stalled fiduciary rule proposed by the U.S. Department of Labor.

“The name of the rule, in and of itself, is confusing and can cause retail investors to reasonably believe that broker-dealers are required to act in their best interests,” said Stein. “Perhaps it would be more accurate to call this regulation ‘Regulation Status Quo.’”

The DOL proposed its own fiduciary standards in 2016 that would apply to any financial intermediary providing recommendations or advice about investments in retirement accounts. While prior law binds all financial intermediaries to a fiduciary standard when giving recommendations within 401(k)s, the DOL proposal would extend such a standard to IRAs as well.

The U.S. Fifth Circuit Court of Appeals struck down the DOL’s rule in March. Industry groups were victorious in their suit, which, in part, argued that the DOL’s rule could prevent many Americans from accessing financial advice and investment products that could be helpful to their lifestyle and to their retirement planning. The American Council of Life Insurers was among the industry groups battling the DOL’s proposal.

“We are encouraged by the SEC proposal to implement a best interest standard of conduct that can be uniformly applied across all regulatory platforms—the states, Finra and the Department of Labor,” wrote the ACLI in a statement. “ACLI strongly supports comments made by SEC Chairman [Jay] Clayton at the meeting about the need for regulatory coordination. ACLI supports reasonable and appropriately tailored rules that require all sales professionals to act in consumers’ best interest.”

While fiduciary advocates called for the SEC to create a strong fiduciary standard that could be applied uniformly across the entire industry, groups like the ACLI called for the SEC to take into account fiduciary regulations being drafted and applied at other agencies, by regulatory organizations and in the states when the agency was creating a uniform standard across jurisdictions and to preserve different standards for brokerage representatives and financial advisors.

One industry group battling the DOL’s proposals, the Insured Retirement Institute, lauded the SEC’s efforts on Thursday.

“We are particularly appreciative of the commission's commitment to collaborating with their counterparts at the DOL, Finra and the state insurance and securities departments around the country to develop a cohesive and consistent regulatory framework,” wrote Lee Covington, the IRI’s senior vice president and general counsel. “IRI looks forward to reviewing the details of the proposals with our members and engaging constructively with the commission in the coming weeks and months."

The SEC’s proposal focuses on disclosure, requiring brokers to reveal information about their conflicts of interest and mandating that they have a reasonable basis to believe that their investment recommendations are in their clients’ best interest.

Disclosure is not enough, wrote David Trainer, CEO of investment research firm New Constructs, in a Thursday blog post.

“History proves that, while disclosure is important, it’s not enough on its own,” wrote Trainer. “There was plenty of disclosure revealing the issues with credit default swaps and CDOs in the lead up to the financial crisis, but almost no one identified them because they were buried in prospectuses running in the hundreds of pages. A disclosure-only standard perpetuates the same needle in the haystack problem plaguing the status quo. Investors shouldn’t have to plow through long and complicated filings just to ensure that their advisors are obligated to fulfill the fiduciary duties of care and loyalty.”

As part of the new disclosure requirements, advisors and brokerage representatives would be required to provide clients with a disclosure form to summarize the client relationship and to explain their standard of conduct, fees and services.

The SEC’s best interest standard doesn’t go as far as the DOL’s fiduciary rule proposal, but some financial watchdogs felt the new standard presents a clearer division between financial advisors and broker-dealers.

Jon Stein, CEO of Betterment for Business, argues that the rule moves brokers closer to a fiduciary standard.

“Retail investors currently are faced with a complex financial landscape littered with poorly disclosed conflicts of interest,” said Stein in a comment released on Thursday. “We’ve long been supportive of any attempt to improve the outcomes of investors and applaud the SEC’s efforts to improve transparency and the quality of investment services.”

Other observers considered the SEC’s proposal sufficient to protect consumers moving forward.

“People are going to say this doesn’t go far enough. I would say that the part about requiring brokers to call themselves brokers rather than "financial advisors” is good enough,” said Josh Brown, CEO of Ritholtz Wealth Management, in a Thursday tweet.

Yet the SEC proposal fails to define what is meant by “best interest,” leaving the term open for interpretation, said Barbara Roper, director of investment protection for the Consumer Federation of America, a fiduciary advocate.

“My first take in reading the SEC's ‘best interest’ standard for brokers was that its biggest failing was its failure to attach any meaning to the phrase ‘best interest,’” tweeted Roper on Thursday. “On further reading, I think an even bigger problem is that it muddies, rather than clarifies, the distinction between brokers' sales recommendations and investment advice. If they don't fix that, they won't just confuse investors, they will mislead them.”

Additionally, the SEC proposes forbidding brokers from referring to themselves as “advisors” or “advisers.” But significant loopholes remain.

Joe Duran, founder and president of United Capital, argued that the SEC’s proposal will simply serve to confuse clients because it does not do enough to clarify the difference between advisors and brokers, nor does it create a uniform standard to protect consumers.

“I think you'll find ultimately this is a bait and switch by the brokerage industry to confuse investors who can't tell the difference between the best interest rule and the fiduciary standard ... smart move for them, awful for the average American … which means consumers won't be able to understand the nuance of the difference between an advisor that's a fiduciary and one who acts under the best interest rule,” Duran said on Twitter on Thursday.

In a series of Thursday Twitter posts, Michael Kitces, partner at Pinnacle Advisory Group, noted that dually registered advisors who operate as an RIA and a broker-dealer would still be able to call themselves advisors, regardless of the context in which they are rendering advice to clients.

“The biggest loophole of all in the SEC's new standard appears: B/Ds not subject to Regulation Best Interest when the broker is a hybrid, EVEN IF the B/D ultimately executes the transaction. RIA advice would be fiduciary. But no Best Interests on how they IMPLEMENT it,” tweeted Kitces.

Duane Thompson, senior policy analyst at Fi360, a fiduciary consultant and support firm, argues that brokers will merely use other confusing titles to obfuscate whether they are required to act in a client’s best interest.

“The premise that business models should drive market conduct standards, rather than fiduciary accountability in a relationship based on trust and confidence for identical advisory services, is flawed,” wrote Thompson on Thursday. “Moreover, the limited restriction on use of ‘advisor’ and ‘adviser’ titles only to fiduciaries falls short by allowing the use of other titles, such as ‘wealth manager’ and ‘financial planner,’ to be available for non-fiduciary advice.”

The proposal for advisors could enforce licensing, continuing education and net capital requirements on advisors while expanding their responsibilities with due diligence and disclosure.

Essentially, the advisors’ standard would collect in one place and codify a hodgepodge of laws, regulations and court decisions that have created a de facto standard for fiduciary advisors since the passage of the Investment Advisers Act of 1940.

Congress Chimes In

On Capitol Hill, one of Congress’s strongest critics of fiduciary reform, Rep. Ann Wagner, a Missouri Republican, looked to the SEC’s proposals as a worthy replacement for the DOL’s fiduciary rule.

“After eight long years, the SEC is finally returning as the rightful regulator of broker-dealers,” said Wagner in a release. “Since taking on this fight against the Department of Labor fiduciary rule almost six years ago, I have always argued that oversight of broker-dealers must be about Main Street Americans and their access to sound financial advice. Plain and simple, the DOL rule was confusing, lacked sufficient economic analysis to be taken seriously, and was already hurting low and middle-income retirement savers. Today’s decision by the SEC is an important first step in overturning years of misguided policy.”

On the other hand, Massachusetts Secretary of the Commonwealth William Galvin, an outspoken fiduciary advocate, said the SEC was acting on a bias that rewarded brokers over independent advisors.

“The Securities and Exchange Commission had an opportunity yesterday to demonstrate that their recent statements about protecting working Americans’ hard-earned retirement savings were genuine,” wrote Galvin on Thursday. “I am sorry to say that their proposed ‘Best Interest’ rule fails to do that. This proposed rule appears to be drafted to appease the broker-dealer industry and their lobbyists, protecting the industry’s best interests instead of the best interests of investors.”

Rob Foregger, co-founder of NextCapital and a fiduciary advocate, acknowledges that there’s still work to be done in creating a clear, easy-to-understand fiduciary regulation for the industry and the consumers it serves.

“We must refine this imperfect proposal into a commonsense best-interest standard that drives regulatory efficiency, market transparency, customer alignment and industry innovation,” Foregger said in a release on Thursday. “Fasten your seat belts, there are miles to go before we sleep.”