By Suzanne Barlyn and Jessica Toonkel

Nov 28 (Reuters) - The appointment of Elisse Walter as head of the U.S. Securities and Exchange Commission leaves financial advisers in the dark about potentially dramatic changes to the business of managing money.

President Barack Obama on Monday named Walter, currently an SEC commissioner, as chairman after the departure of Mary Schapiro on Dec. 14. How long Walter will remain in the new role is unclear.

As the so-called chairman designate, Walter can stay until December 2013 without U.S. Senate confirmation. The White House is said to be looking at other replacements and could nominate someone soon.

The change of command creates some big questions for advisers. First and foremost: whether Obama will renominate Walter to serve longer, or, if she is not confirmed, who may follow her. Other key issues include beefed-up ethical standards for brokerage firm advisers and a possible new overseer for other types of advisers who register with the SEC.

"It's the great unknown," said Knut Rostad, president of the Institute for the Fiduciary Standard, an advocacy group.

Prospective names for the next SEC commissioner include Mary John Miller, the Treasury Department's under secretary for domestic finance, and Sallie Krawcheck, former president of global wealth and investment management for Bank of America Corp.

Their views and experience could shape the landscape for U.S. financial advisers.

AT STAKE

Possible rule changes that may completely alter business for some brokers have been afoot since the Dodd-Frank financial reform law was passed in 2010. The new SEC chairman's views on these rules can have long-lasting implications.

Currently, investment advisers, who register with the SEC, must act as "fiduciaries" and recommend securities that are in their clients' best interests. Brokers, who are licensed through the Financial Industry Regulatory Authority, an industry-funded watchdog, must recommend "suitable" products for clients based on factors such as risk tolerance and age.

One possible rule change under consideration is that all brokers would be held to the fiduciary standard. The industry wants a new type of fiduciary standard that accommodates certain business practices, such as selling company-branded securities, which can pay brokers bigger commissions.

Meanwhile, there is an ongoing tug of war between the SEC and the Financial Industry Regulatory Authority over which entity should oversee registered investment advisers. The new chairman is expected to weigh in on this issue, too.

INSIDERS VERSUS REGULATORS

Some brokerage advisers are already compiling a wish list of attributes in a new SEC head. A future chairman with extensive financial services industry experience, like Krawcheck, who headed wealth management at both Bank of America and Citigroup Inc, or Miller, a 26-year veteran of T. Rowe Price Group Inc, might be able to approach these issues from a practical perspective, according to industry specialists.

"It would really help to have someone who has worked in the industry," said Robert Kurucza, a lawyer at Goodwin Procter LLP in Washington, who worked in the SEC's division of investment management in the 1980s.

Krawcheck may have the best chance of potential candidates to strike compromises appealing to brokers and investor advocates, said Barbara Roper, director of investor protection for the Consumer Federation of America, an advocacy group.

Krawcheck was an early public advocate for an industry-wide fiduciary when she headed up Bank of America's global wealth and investment management division. She was ousted from Bank of America in 2011.

She would be "particularly well positioned" to counter questions raised by the industry about whether costs to implement the standard justify the benefits, Roper said.

The question, of course, is whether candidates with insider experience may be too close to the industry and push for rules that favor them, Roper said.

Other possible contenders have long histories as regulators. A trove of public statements makes their positions well-known.

In 2011, Walter, a former FINRA executive and official at the Commodities Futures Trading Commission and SEC, wrote of her enthusiastic support for a self-regulatory organization to oversee registered investment advisers, who are now examined by the SEC about once every 11 years.

Some, however, see Walter as conflicted, given her ties to FINRA. It is funded by the brokerage industry and is lobbying to become a self-regulatory organization for investment advisers.

Walter, 62, also outlined her concerns about different regulations for securities brokers and registered investment advisers in a 2009 speech.

FINRA's chief executive, Richard Ketchum, is also rumored as a possibility. Since taking charge of FINRA in 2009, Ketchum has been vocal about appointing a self-regulatory organization to oversee registered investment advisers and the retail brokerage industry's responsibility to act in the best interests clients.

Ketchum would likely receive a mixed reception from financial advisers, especially those registered with the SEC and facing the prospect of self-regulatory oversight, said Arthur Laby, a securities law professor at Rutgers School of Law in Camden, New Jersey.

But there is an upside for them: that change, which would require congressional approval, is likely a long way off.

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