Do you know that your life insurance agent gets paid when she helps you purchase a life insurance policy? And so does a financial planner, if you’ve chosen to go that route, instead. Sounds fair: professionals being paid for offering their expertise to help you shape a better future. It happens all the time across many professions from real estate to medicine.

That may be set to change, at least for life insurance agents.

Recently, Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.) introduced financial-services reform legislation in Congress. Both the House and Senate bills refer to the “harmonization” of financial advice under something called the fiduciary standard. This “fiduciary” standard has largely been pushed by certified financial planners as the only standard that can ensure the American public is receiving objective advice under a “duty to act, primarily for the client’s benefit in matters connected with the undertaking and not for the fiduciary’s own personal gain.”

The logical extension of this change could result in the SEC outlawing commissions as an acceptable form of compensation. The assumption would be that commission motivation is, de facto, proof of the agent not acting “primarily for the client’s benefit.” That means if a life insurance agent helped you buy your policy, he would not be able to get paid the way he’s been paid in the past, as his means of payment is a commission on the sale of the policy.

Is this really in the best interest of the American public? Well, the Association for Advanced Life Underwriting tells us that studies show that less than 17% of fee-based plans are ever implemented. Fee-based planners get their fee for a plan, but they are not obligated to make sure it’s put into action. Is that in the client’s best interest?

If a fee-based planner charged $150 an hour for three hours to analyze a client’s life-insurance needs and suggested a $500,000 term insurance policy that has a $300 annual premium, is the client better served by paying $750 in fees and premiums instead of just the $300 premium that he would pay if he got that advice from an agent?

Why is a life insurance agent, who may devote hours of work with no assurance of compensation, automatically assumed to be less faithful in his “duty to act primarily for the client’s benefit” than the fee-based planner who won’t begin work until the client has signed an agreement and paid a fee?

John F. Kennedy once said: “In a very real sense, insurance sets standards of performance and responsibility for all American business. Surely Americans derive their image of business most often from the relationships they establish with their insurance agents. The varied services performed by American insurance can do much to carry forward our traditions of freedom.”

Most insurance professionals I know have no problem with the idea of fee-based planners getting paid by fees. But fee-based planners, evidently, want to eliminate the practice of insurance professionals being paid by commissions.

Maybe Rep. Frank and Sen. Teddy Kennedy’s best friend in the Senate, Sen. Dodd, should look again at what President Kennedy said before they hit the wrong notes on “harmonization.”