Financial "Prescriptions"

The recently enacted consumer protections for financial products seek to outlaw deceptive or difficult to understand investment vehicles, but they have drawn criticism for limiting the choices available to more sophisticated investors. One common analogy used in reporting the restrictions is to liken them to prescription drug controls. If we extend that analogy, I think that there should be three classes of investment products: simple, transparent ones (over the counter), controlled ones requiring a certified financial advisor's written approval (prescription), and those that are simply outlawed (snake oil). Having an inbetween classification would help ease the difficult decisions as to what is and isn't acceptable and still gives companies an incentive to simplify products as the need to seek financial advice constitutes a barrier to entry. I see it as an attempt at demand side financial reform, rather than supply side, which usually gets the most scrutiny. Had such a system existed prior to the housing boom, not many sub prime mortgages would have been sold.