The average investor is not going to leave the market. I spent time as a retail broker, and the truth is most have no idea what they were doing to begin with. I don't think this is going to persuade them to stop.
Their 401ks, IRAs and the like only work as tax shelters if they invest and (for the most part) they don't even have a choice of which firm they work with.
So long as the firms don't skim more than the tax benefit is worth to the average investor, it's still in the investor's best interest to keep contributing.
Those investors (no idea what they were doing to begin with) already got spooked by the 60% drop and pulled out of 401k/into bonds. I mean the average investors who have some knowledge of the market, and have decent capital (20k-200k) but is just trading normally using online trading services.
Trust me, they don't leave. There's something about the markets that make people think that they can compete against a firm with a multi-billion dollar IT department, a slew of economists, and direct access to the exchanges. I'm not denying that the game is in favor of Wall Street firms. I'm simply saying that this will not cause retail investors to exit the market.
