Elizabeth’s note: The on-site reporting for this story was generously provided by Timothy Welsh, principal of Nexus Strategy LLC of Larkspur, Calif., who kept notes and gave me a report by telephone from the front lines. Other attendees at FPA are sending in reports for tomorrow’s coverage. If you’d like to send us a report, drop me a line at elizabeth@riabiz.com.

Key elements of the independent advisory world, including Fidelity Institutional Wealth Services, are reaching out to broker-dealers at the FPA conference to show them how to adopt a commission-based business model to a fee-based fiduciary world.

About 2,200-2,300 advisors and service providers are gathered in Denver through Tuesday for the FPA’s annual conference. At a pre-event session Saturday, senior executives from about 100 large firms gathered for a special symposium about how financial planning can be delivered by large firms with a history of brokerage services.

Merrill Lynch, Ameriprise and AMP show up

Firms like Merrill Lynch, Morgan Stanley Smith Barney, Prudential, MetLife, LPL, TD Ameritrade, Ameriprise, Raymond James as well as the largest financial services firm in Australia, AMP and many others are looking for answers.

Rising consumer demand for the service and new legislation and regulation that are pushing the industry in the direction of a fiduciary standard.

One of the key themes that emerged was that it is possible to deliver financial planning services under a fiduciary standard without abandoning commission-based compensation, said Tim Welsh, principal of Nexus Strategy LLC, who is involved in the FPA’s major firms task force.

One fiduciary expert at the symposium, Don Trone, suggested that broker-dealers will cope by making some of the better-equipped advisors into fiduciaries, perhaps about 30%.

Don’t preach…teach

“The new reality is coming soon,” Welsh said. “The executives were engaged and asking questions. ... (They were saying) don’t preach to me … give me some practical advice.”

Last week, I asked FPA Chief Executive Marv Tuttle whether having FPA make this effort was a little like selling the secrets of the advisory world to the dark side. He responded with a definitive no.

“We’re always been about sharing and helping everyone thrive and prosper,” he said..

The FPA has always served as the industry’s broad tent, with about 60% of its members dually registered, 25% fee-only and a representation from pure commission brokers and insurance agents, as well. Attendance at this year’s conference is expected to be about 10% higher than last year in Anaheim, Calif.

See this earlier interview with Marv , The industry’s largest association has plenty at stake at its annual conference this weekend, in which he frankly discusses the past two difficult years for the FPA and the fact that he doesn’t forsee an eventual merger with the CFP Board.

FPA’s large firm opportunity

While it’s rare for a large firm’s advisors to join the FPA en masse, the organization is capitalizing on the new need on the part of large firms for advice on how to deliver planning services under a fiduciary model. For firms with more than 100 advisors (including RIA firms of that size) FPA is offering some of its services, such as its executive community training and education programs, conference attendance, and consulting and research, on a piecemeal basis.

There are signs others that have had success selling services to independents are also widening their target markets.

At a practice management panel for the large firm executives, David E. Canter, executive vice president at Fidelity Institutional Wealth Services and head of Fidelity’s Practice Management and Consulting organization, was presented with a hypothetical problem: a firm with 2,500 advisors and 100 branch offices, where the advisors were reluctant to adopt the fiduciary standard and the firm wasn’t seeing success selling planning services.

His solution: integrating technology. The examples he gave showed how Fidelity’s WealthCentral platform could fix the firm’s problem. Fidelity recently gave broker-dealers who clear through another branch of the company unfettered access to WealthCentral.Fidelity elevates hybrid offering by giving RIA technology to thousands of IBD reps

First foray

“This could be their first foray (into the wider market of brokers),” Welsh said.

Among the new educational resources the FPA is offering is a program by Trone. Called Fiduciary Ethos, it offers brokers a toolkit to help them incorporate the fiduciary standard into their operations.

Trone said not all advisors can or should be fiduciaries. He believes that brokers will chose some advisors — perhaps about 30% — to serve as fiduciaries. Some will chose to stick entirely to the transactional world. See:7 things a financial advisor needs to know to succeed in the 401(k) business

Problem is dabblers

The big problem, he said, is there will be the many advisors in the middle who dabble in both.

He believes the imposition of the fiduciary standard is inevitable, not only because of Dodd-Frank but because of new regulations being issued by the Department of Labor that raise the standards to which retirement plan advisors are held, and new regulations from the SEC, such as those that cap 12b(1) fees.

Once the fiduciary standard is in place, and the standard becomes a commodity, soft skills will differentiate between the good and bad guys, he said. Those soft skills include the ability to build trust, offer leadership, maintain loyalty and manage a decision-making process.

Wave of the future?

There was a large contingent of advisors from Australia at the convention, Welsh said. Australia has recently regulated away commissions, so that financial planning is delivered on a fee-only model. Financial planning in Australia is heavily regulated, Welsh said.

“If the GAO comes back and says financial planning should be regulated here,” he said, referring to one of the studies mandated by the Dodd-Frank financial reform. “I could see them looking to Australia for a model.”