There's a difference in the term "investor".
Your everyday normal "retail" investor should be protected by the law and regulatory agencies, e.g. requirement that companies offered to trade their stocks for unqualified investors need to follow SEC guidelines on accounting and business best practices, that insider and politicians' deals are regulated/reported, that environmental, consumer protection and labor laws are followed and that such companies are audited for compliance. For investment vehicles (e.g. funds, stock options that are not part of "employee stock" programs), that the risk of major or complete loss is limited (=investments done by these with the assets of normal investors should follow the same rules, and that investments into assets requiring accreditation do not exceed 20% of the assets under management of the investment vehicle). Obviously, that also limits the return of investment aka the pricing of risk.
Accredited investors / investment vehicles allowed to invest in high-risk assets however? The accreditation should represent an exchange: you get the potential to higher return of investment unlocked, but as a price for that you have to:
1. prove you can stomach significant losses (=you have to own your residence and can only invest 80% of your net worth into investments requiring accreditation)
2. spread investments so that no single or related (e.g. by majority ownership) high-risk investment exceeds more than 20% of your total portfolio. Exceptions can be made for holding companies, SPACs and similar investment vehicles, provided that their investors follow the same exposure limit.
3. prove you/your staff are actually qualified to make qualified decisions: professional education (e.g. a university degree in economics, finance and related subjects or training provided as part of employment at a bank or other financial institution) and the time to adequately review the companies you invest (=someone who works 60 hours a week in a non-finance related job should not be assumed to have enough free time and mental capacity to review and follow-up documents)
4. waive your right to protection by regulatory agencies and the judicial system to a degree that reasonably expectable efforts (such as calling up certification issuers to verify authenticity of a certificate) have to be undertaken.
5. agree to be held fully liable for your loss and the loss of your clients if you violate the rules or act negligently.
That way, the assets of the majority of the population are protected against loss of their investments, actual professionals now have a monetary incentive to responsibly invest their assets, and auditors have the incentive to actually do their job (and if they do not do that on their own, their liability insurance will make them do!).
A case could also be made for an intermediate class of investor to allow people not meeting the criteria to invest a limited portion of their assets (e.g. cap at 20% of net worth excluding primary residence, require a minimum net worth of 200k $) into high-risk investment.
We do the same with other high-stakes jobs (doctors, pilots) and organizations (see e.g. how cyber-security insurances force companies to introduce IT security measures as part of providing insurance coverage) - why don't we do the same with the finance industry? There have been more than enough high-profile cases now, some of which actually caused global crisis events.
ETA: Additionally, "margin trading" should be banned or at least strictly regulated for all investors. The amounts one can see in the "Loss Porn" section of r/wallstreetbets are simply inconceivable. No one should be able to YOLO their retirement funds into Gamestop ffs, and no one should feel forced to off themselves because their bank showed them a 730k US-$ margin call [1].
[1]: https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-y...