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) -- Online brokers may not be completely exempt from the debate regarding "fiduciary duty" despite the assumption that any new rules will leave them largely unscathed.

Firms offering online discount services, such as

Fidelity Brokerage


TD Ameritrade

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Charles Schwab

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E*Trade Financial

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, will all need to reconsider some business practices if -- or when -- new rules are adopted.

"At first glance, it looks like it may not be a big deal for them ... but if we look at their operations in greater detail arguably you could say that they could be held to a higher standard," says Dr. Yuval Bar-Or, a risk management consultant and adjunct finance professor at Johns Hopkins University's Carey Business School.

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As part of the stronger consumer protections being implemented under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and signed into law on July 21, the

Securities and Exchange Commission

is required to conduct a study to assess "the effectiveness of existing standards of care for brokers-dealers and investment advisers, and whether there are gaps, shortcomings, or overlaps in the current legal or regulatory standards," the agency says on its Web site.

Practically, regulators are considering replacing the standard that brokers need to meet when selling products. Currently brokers are subject to the "suitability," meaning that a stock or other security must meet the needs and investment experience of a client. Under a fiduciary standard, however, the broker or RIA will need to place the client's interests before his own, or the firm's.

Investment advisers and industry participants have often complained about the lack of rigorous rules required of brokers when it comes to investor protections, arguing that consumers were steered into risky or complicated products in exchange for a hefty commission fee.

"Broker-dealers and investment advisers provide critical financial services to millions of American investors," said SEC Chairman Mary Schapiro said in a late July press release. "A system that fairly and effectively regulates these market participants is essential to protecting investors."

The SEC is in the process of collecting public input and comments related to this issue and is supposed to report its findings by early next year.

Discount brokers that do not provide advice to retail clients -- but rather execution and education on investment strategies and products - were thought to be spared the lion's share of the regulatory burden if a fiduciary standard is adopted.

But depending on what the final version of the rule change says, online brokers may have to make changes to their execution practices, Bar-Or says.

For example, many large online brokers often use third-party providers for certain product data and trade execution, like fixed income products, Bar-Or says. The discount brokers will likely have to take a second look at their relationships with the third-party providers to ensure that the relationship is in the best interests of their customers, whether that's through quality of service or cost, he notes.

"Discount brokers may have more of an obligation to find a third party provider that does a better job. ... In a legal sense they may be held to that higher standard," Bar-Or says. Disclosure is also likely to be another category for enhancement, perhaps requiring the firms to place more focus on their internal compliance systems. "If they have to install new systems," Bar-Or says, the question is "will they begin to pass costs onto clients?"

That being said, any rule changes may also prove to be an opportunity for the online brokers as some investors may feel safer and more in control by making more of their own decisions about their investments. It would be a continuation of the trend over the past decade or so as investors and consumers move to take more control over their total financial portfolios.

"The fact that this whole notion

fiduciary duty is in the news to begin with should be opening more people's eyes that these are issues and this really does impact them," Bar-Or says.

Not all discount brokers are convinced that the fiduciary standard will translate into sweeping changes.

Online brokers like


were quick to say that since they do not provide specific advice any change to the rule is almost moot for them.

Christopher Larkin, senior vice president of E*Trade Securities, who is responsible for the strategic direction of the firm's active trading, options, and futures segments, says that while any change the firm has to make in order to comply with the amended rule is likely to be incremental in nature, there is opportunity to take additional market share from bulge bracket firms.

"The one thing you can take from it clearly is the SEC is driving towards making sure financial institutions are acting on behalf of the clients' best interests," Larkin says "It is a good thing from our standpoint

because really our model is set up that way."

Larkin also used the example of fixed income products in saying that: "We do not mark up our bonds and purely act on an agency basis. That's not something that's traditionally done at some of the full-service firms out there."

E*Trade does not offer any proprietary products. "We're trying to be as transparent as possible for customers," on prices and fees charged to customers, Larkin says.

E*Trade and other brokers are also bumping up their education resources for customers "to teach them to be better investors," he says, which of course doesn't hurt the firms' bottom lines. Larkin adds that that if a client does use one of E*Trade's financial advisers, located in their branches, they are already covered by the fiduciary rules.

The online brokers don't offer advice in regards to specific stocks for their retail customers. However, firms like Schwab and TD Ameritrade do offer back-end and custodial support for independent financial advisers.

A Scottrade spokeswoman said in an e-mailed statement that the firm "won't know the impact until we see the language of the proposed rule change, but our current understanding is that the fiduciary duty standard would only apply where a firm makes recommendations or provides advice. We do neither. All our customers are self-directed."

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.