I agree broker-dealers are not fiduciaries, but aren’t zero commission trades for customers better than commissioned trades? And is not about maximizing the payments as the SEC says, it is about the lack of “toxicity” in the orders; the assumption is that trading against retail flow is that it is more valuable to market makers because the trades are less likely to be informed on which direction the market is going to go. This does not mean retail traders are not getting the best price, just that market makers are willing to pay a premium to interact with this flow.
> As I recall, broker-dealers are legally required to get you the best price they can.
With PFOF, broker-dealers are still required to honor the best price posted by the national exchanges as per Reg NMS.
> I'm not convinced retail investors are so dumb that lights and noises make them trade.
Are you sure about that? IMO, It isn’t too dissimilar from making brokerage accounts more like slot machines or candy crush. If you can make something more addictive for your customers to use, it could be a problem. Making it illegal to use push notifications to trigger FOMO seems like an easy move to make on this front.