However, the opponents of the fiduciary standard argue that this legislation would reduce investment choices for middle-income and beginning investors. Good! As I mentioned in this column, more choice doesn't improve an investor's experience.
Fewer, better choices are what we need. If all financial advisors had to put their clients' best interests first, we would see fewer choices. All the mediocre and poor investment options, which simply clutter up the decision-making process and do not serve the investor, would no longer be available.
Fewer, quality options would result in more simplistic portfolio allocations. But simplistic allocations do not have to result in less satisfactory portfolio risk-adjusted returns. Allan S. Roth, advisor and author of "How a Second Grader Beats Wall Street," and Craig Israelsen, Ph.D., author of "7Twelve: A Diversified Investment Portfolio with a Plan," among others, have illustrated the effectiveness of such an approach. Simple portfolios produce similar rates of return to more complex options, are typically available at a lower cost, are low maintenance and involve minimal stress.
(Read more:Long/short strategies for a souped-up market)
What's good for investors is not necessarily good for financial-product manufacturers and distributors, but the latter will survive and evolve. Doing what's best for investors may require limiting their investment options—and I think most will be grateful for the added efficiency and simplicity.
—By Sheryl Garrett, Special to CNBC.com. Certified financial planner Sheryl Garrett is CEO and chief compliance officer of Garrett Investment Advisors.