“The sting operation had the trappings of a Wall Street thriller, except that it was run by a team of Harvard and MIT economists. In an audacious experiment, the professors dispatched a squad of undercover operatives across Cambridge and Boston to pose as middle-class investors and ask retail brokers for investment advice.

“The results were revealing. Just 21 out of 284 brokers contacted by the phony clients recommended investing in index funds, which mirror broader market performance and carry the smallest fees.

“Nearly half the brokers, meanwhile, steered clients toward actively managed mutual funds. Those funds — which sometimes beat the market but most often don’t — carry higher fees that enrich brokers and fund managers but, critics say, stunt the growth of middle-class nest eggs.”

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“For all the lobbying over financial reform, the struggle over how to regulate retail brokers could have the biggest impact on mom-and-pop investors. Supporters of tougher standards say they want to reduce the influence of hidden payments and commissions that give brokers an incentive to steer clients to high-fee investments regardless of return.

“What the industry is fighting for is to continue to have undisclosed conflicts of interest that allow them to put their personal economic interest above the best interest of their clients,’’ said Dennis M. Kelleher, chief executive of Better Markets, a nonprofit advocacy group that supports regulations to change broker behavior.”

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“Consumer advocates contend the report was based on a loaded survey question. In the question, respondents were told retirement plan managers might be prohibited from giving employers investment guidance. False, say advocates.

“This is the Wall Street fog machine that spews out misrepresentations, disinformation, if not outright lies,’’ said Kelleher, with Better Markets.”

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Read the full Boston Globe article by Christopher Rowland here.