That is bad policy. There is a segment of middle/upper class Americans who own stock; anyone with a retirement plan that funds it. Forcing middle/upper class legislatures into a cash position instead of stocks would make them less, not more connected to similarly placed people. If they can't own stock does that mean they'll just instead invest in real estate which can be even more conflicted?

Of course, if they held widely diversified Index funds there would be fewer conflicts - but not zero as evidenced by legislators trading around COVID briefings.