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This is how it is, how it has been and, as far as I can see, how it always will be. As long as people are told that investing is a dangerous business and they can do it only through the agency of a qualified and approved 'advisor' they will simply never make good decisions.
The one thing the industry loves is more regulation. This justifies high fees and, most importantly, creates large barriers to entry. It makes spivvy insurance salesmen like doctors or lawyers. So, it's not surprising that the government is proposing more regulation. They have consulted extensively with interested parties, overwhelmingly the banks and existing industry, and they have concluded that, although regulation has given terrible outcomes in the past (think of just about anyone you know who has been sold any financial product over the last decade), the solution to the problem is ... drum roll ... more regulation!
Of course you need a highly experienced professional, expensive regulator to manage this, so let's welcome Martin Wheatley who has arrived from HK to run the newly-created Financial Conduct Authority. Apparantly the problem is that we didn't understand enough about behavioural economics, not that greedy salesmen routed savers into rip-off products because that was what maximised their commissions.
Of course, as usual real estate, carbon credits, bamboo plantations, land banks, wine, diamonds, precious metals, art and the rest remain outside the scope of this regulation. So valuable do ordinary savers feel the regulation is that they put much more of their money into unregulated buy-to-let properties than equities, even though for the large majority a few REITs, directly held, would offer a far better exposure to UK property than even a quite large portfolio.
References
http://www.ft.com/cms/s/0/7a681cc2-4674-11e1-85e2-00144feabdc0.html
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