Actual Rules from Wall Street

Goldman Sach's in 2001 published guidelines that employees must follow for written communications (eloquently titled United States Policies for the Preparation, Supervision, Distribution and Retention of Written And Electronic Communications, although I'm sure that people in-the-know refer to it as 'USPPSDRWAEC').  Here is a direct quote from USPPSDRWAEC:

"Prior to recommending that a customer purchase, sell or exchange any security, salespeople must have reasonable grounds for believing that the recommendation is suitable."

So not only do investment recommendations need not be in clients best interest - merely needing to be suitable - apparently it is not even required that the salespeople (How come these people are never referred to as 'salespeople' on their business cards or in those TV commercials?  When their company itself calls them salespeople, why are they allowed to masquerade as 'financial advisors', 'financial consultants' and 'wealth managers'?  But I digress...) know for certain that their recommendation is suitable.  They just need to have 'reasonable grounds' - any defensible theory that in some circumstance the investment would be reasonable - to believe so.

This must be very reassuring to their clients

Abelson, Max and Winter, Caroline. “The Goldman Rules: Excerpts of the bank's real, actual communication policies.” BusinessWeek, April 25 - May 1, 2011