Yale University Chief Investment Officer recently published an op-ed in the New York Times explaining that the current model of securities regulation allows the financial industry to take advantage of the less well off. He calls for a more aggressive and intelligent securities regulation, including holding the mutual fund industry to a fiduciary standard.
Seeking Alpha reviews the op-ed and explains how prospectus disclosure of conflicts (like trailer commissions) may actually make matters worse. Studies show that disclosure is not effective for retail investors and may promote advisors into giving even more conflicted advice (i.e. selling higher fee mutual funds than the advisor would sell in absence of disclosure).
