Nearly every registered rep these days calls himself a financial advisor, even if he is better described as, well, a Series 7-holder—a person who sells financial products. As most know, true financial advisors—those who hold Series 65s and Series 66s, and who are fiduciaries—aren’t too happy that Series 7-holders have been able to cast themselves in this light.
For years, the SEC punted on this—basically allowing registered reps (Series 7-holders) to call themselves “financial advisors,” as if they were regulated by the SEC under the Investment Advisers Act of 1940 like financial advisors are. (There is a big difference, financial planners argue; go check the meaning of the word fiduciary. But Series 7-holders argue they are plenty regulated—by the NASD, and, in some cases, the NYSE, and have compliance people crawling all over them.)
In April 2005, the SEC officially muddied the waters by trying to “split the baby,” as one wirehouse lawyer put it, coming up with rules for when Series 7-holders had to stipulate that they were now acting as “brokers” and “salespersons.”
Today, the SEC announced that it would officially conduct a study to see if allowing the so-called “Merrill exemption” did in fact confuse retail investors or not. So, the exemption is again being investigated. In a release, the SEC said it was looking for an organization to conduct the study that would compare how the different regulatory systems that apply to broker/dealers and investment advisors affect investors. For more information, please read "'Merrill Rule'" Debate Not Over 
Here are stories that have run in the pages of Registered Rep. (or were featured exclusively its Web site):
For more on the complications of living under two regulatory frameworks, please read "Both Sides Now" 
The SEC adopted the broker-dealer exemption, much to the chagrin of the financial-planning community, in April 2005. For more information, please read "SEC Adopts Broker-Dealer Exemption" 
The Financial Planning Association, in response, sued. Check out "FPA Sues to Stop Broker-Dealer Exemption"  for more information.
The SEC has already done studies that showed investor confusion about the distinctions between a broker and a financial planner. Find more information here: "House Urges SEC to Adopt Broker-Dealer Exemption"