While executives at the nation's largest banks and securities firms scramble to repair their balance sheets, their counterparts at independent and regional brokerages are worried about another issue-the financial condition of their clients.

The 30%-plus declines in equity markets around the world will eventually force the financial services industry to "step back and re-evaluate risk," observed Bill Dwyer, president of LPL Financial's independent advisor services unit. Dwyer spoke during a panel discussion this week at the Securities Industry and Financial Markets Association conference in New York. Others panel participants were Chet Helck, president and chief operating officer of Raymond James Financial; Ronald Kruszewski, chairman and chief executive of Stifel, Nicolaus & Co.; and William Johnstone, president and chief executive officer of Davidson Companies.

"Our business models are working well," Kruszewski said. But "our clients are getting clobbered and that doesn't bode well for business."

Reconciling these two overriding circumstances clearly is prompting serious thinking among all financial services executives as they wait for the markets to stabilize and choppy seas to settle. All of them are expecting major changes in the regulation of financial services, and while regional and independent brokerages bear little or no responsibility for the subprime mortgage debacle, it doesn't mean they won't be impacted by the ramifications of the crisis. Moreover, the collateral damage to most Americans' portfolios is driving that point home.

"The model of providing advice as your principle business activity has never been more on point," Helck told attendees. "The need for advice, risk management and diversification is being recognized by people. It serves as a reminder of the importance of putting clients' interests first."

Helck noted that Raymond James-affiliated advisors who lived through the vicious bear markets of the 1970s say that the environment, fear and uncertainty are worse now than then. Like most firms, Raymond James has increased its communications to advisors, reasoning that continuing to "communicate with them encourages them to keep communicating with clients."

All four panelists recognized that wild swings in the stock market are forcing advisors to work long hours and are changing the economics of the business. Yes, the demand for advice is rising. But as Dwyer noted, the costs "of providing advice have gone up, but the cost of advice itself has not."