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[–] daskapitalist 0 points 5 points (+5|-0) ago 

Folks, let me explain how this works. In the past, these advisors were required to provide "suitable" advice. It couldn't be /bad/ advice, but suboptimal investments with high fees were OK. This regulation would raise the standard to something approaching "ideal" advice - but there's a catch. Ideal investments are suitable for homo economicus - low fee index funds that you buy and hold for decades. These provide minimal income for financial advisors, which sharply limits the amount of resources financial advisors can dedicate to working with non-homo economicus investors (read: average people who have to be talked out of panic selling and chasing bubbles).

So while the "ideal advice only" is well-intended, it basically cuts out average investors from being able to get advice at all because advisors can't afford to spend hours working with them for pennies. While the homo economicus investors who'd use the "ideal" advice don't need financial advisors in the first place. The logic is like banning personal trainers and forcing people to either self-motivate to exercise or go to very costly physical therapists because paying some college kid $20/hr to talk you out of foolishness is suboptimal.