It's not just clients who don't understand what people who hold themselves out as financial advisors are obligated to do for them. A new survey shows that many advisors themselves are confused about what they are required to do for clients.

Envestnet, which provides wealth management services to the advisory industry, today released the results of a survey that showed four in 10 advisors polled say that, to the best of their knowledge, all financial advisors are currently subject to the same obligation to act in their clients' overall best interests. Of the respondents who put all advisors on the same fiduciary playing field, 63% were wirehouse brokers and 29% were registered investment advisors. Only RIAs are currently subject to a fiduciary standard to hold a client's interest above their own as part of the relationship.

However, the broad regulatory overhaul of the banking industry approved early Friday by conferees from the U.S. House and Senate would affect the relationship between most financial advisors and their clients. In particular, it would give the Securities and Exchange Commission the power to establish rules holding brokers to a fiduciary level of duty similar to that of RIAs.

"Even as legislators at the national level debate whether all financial advisors should follow a uniform professional standard, it's clear that many financial professionals-and certainly the great majority of investors-don't know how to accurately define the scope and nature of an advisor's responsibility to clients," said Bill Crager, Envestnet president.

Relatively few financial advisors or investors seem to have been following the legislative discussion closely. According to the Envestnet survey, just 18% of advisors (12% of wirehouse brokers and 22% of RIAs) say they are "very familiar" with the debate on fiduciary standards; nearly three quarters of investors say they are either not very familiar with the discussion (50%) or not familiar at all (23%).

But the survey also showed that even after two years of economic and market upheaval, relationships between financial advisors and clients are fundamentally strong. Nine of 10 advised investors say that over the past 18 months, "my advisor always acted with my best interests at heart" and eight in 10 agree that the "value I have received from my advisor is more than worth the cost." About two thirds of advised investors say their portfolio has done better over the past two years compared with most people they know.

Still, financial advisors and investors generally agree that external factors such as high profile scandals like Bernie Madoff and the market collapse of 2008-2009 have been big factors shaping a heightened focus on professional responsibility. But investors-to a much greater degree than financial advisors-cite damage to personal financial security, growing investor empowerment, and a loss of trust in advisors generally (personal satisfaction notwithstanding) as significant reasons why financial advisor responsibility is now under such close examination, the survey says.

The poll of 504 financial advisors (171 wirehouse brokers, 167 advisors at regional/independent firms, and 166 RIAs) and 1,023 investors (761 advised and 262 un-advised) was conducted between April 14 and April 30, 2010, by the national polling firm Mathew Greenwald & Associates. So that the views of investors with advisors were well represented in the poll, approximately three quarters of the investor sample was allocated to advised investors via use of a quota.