This of course raises the question of what it is that brokers who serve the middle class — people at mass market brokerages who pick up the phone when you dial the number on your company's 401(k) site — are doing to make money. The answer is that they are earning a living marketing financial products that are profitable to their employer and disguising the marketing as advice.(....)
Obama is proposing to force people who purport to be advising on investment strategy to actually give good advice and reveal conflicts of interest. That the bank lobby claims this will put their advisors out of business is a damning indictment of the way they've been running their industry. More formal studies show the same thing, that investment advisors reenforce their clients' worst instincts, "encourage returns-chasing behavior, and push for actively managed funds that have higher fees, even if the client starts with a well-diversified, low-fee portfolio."Details of proposed rules here.
Update: Ben Walsh weighs in.