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.