A new industry code will try to get them back to basics. But that means giving up several roles:
RAINMAKERS: Analysts issue favorable reports before IPOs and when managers become eligible to sell their shares.
SOLUTION: Bar analysts from sharing in investment-banking profits.
BLIND OPTIMISTS: Last year, as the S&P 500 and Nasdaq swooned, 99% of all recommendations were "buy" or "hold."
SOLUTION: Require brokerages to distribute independent research.
SHAREHOLDERS: Many firms let analysts own stock in the companies they cover.
SOLUTION: Block analysts from profiting from companies they research.