What do you think of this idea, floated by Yale economist Robert Shiller in the latest issue of Atlantic Monthly:

There’s a strong case to be made that the government should subsidize comprehensive financial advice for low- and middle-income Americans to help prevent bubbly thinking and financial overextension. One way to do this would be through co-pay arrangements like those in place for Medicare or for private health insurance. Accredited advisers, charging a flat fee, would be partially reimbursed by the government; the moderate costs to consumers would create a much broader market for their services.

Shiller, the “Irrational Exuberance” guy known for his prediction of the dot-com bubble as well as the bearer of bad news S&P/Case-Shiller Home Price Index, says that the average person’s inability to assess risk, price and affordability has contributed to the current real estate mess we’re in.

Treating financial advice like medical advice is an intriguing concept. And finding a  sales-pitch-free advice model for the masses is a subject that I’m passionate about. But I think I read somewhere about how our health care system isn’t feeling so well.

And given the current deficit, I pity the fool who would be charged with convincing the government that financial advice for those of modest means is as critical as life-saving health care or food stamps.

This entry was posted on Tuesday, July 8th, 2008 at 5:33 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.