11/21/2013 07:40 pm ET Updated Jan 25, 2014

The Tobacco Industry Is More Transparent Than Finance, And It's Time to Change That

As we approach the 100-year anniversary of the modern cigarette, it's time to reflect on corporate accountability and maybe get some answers.

Despite numerous attempts by smokers and their families to prove otherwise, the CEO of a cigarette company has never been held liable for a smoker's lung cancer. Why? Because cigarette packs come with a clear and sometimes graphic warning label that details the product's side effects.

You can't hold a company accountable if you're fully warned and advised of the downside of the company's products.

Today, we don't debate if cigarettes are safe or deadly. We look for new ways to safeguard the public and continue to educate them about the potential impact to their health that smoking causes.

But the same is not true for financial services. Investors have seen firsthand the damage Wall Street firms can do and the devastation they can spread when left unchecked. But what has changed? Not a single Wall Street executive has been held personally accountable for the financial crisis. True, investors are given pages and pages of dire warnings with every investment option -- but what warning are they given when it comes to accepting financial advice?

It's an issue I'd like to see discussed on stage at the Bloomberg Business Summit in Chicago, where some of the nation's top CEOs and titans of finance are gathering this week to debate the future of their industries.

Either financial services firms have a fiduciary duty to put the client first, or they are accountable for communicating that they are taking risks with the health of investors' portfolios. At the very least, they should allow the consumer to make an informed decision. As it stands now, the risks associated with the wrong financial professional are not stated as clearly as the warning on a pack of cigarettes.

The Wall Street Journal recently detailed the number of ways brokers are putting their own bottom lines ahead of their clients' interests. In an article focused on a 44-page FINRA report that catalogues some -- not all -- of the conflicts inherent to the brokerage model, the paper tries to find glimmers of hope and give investors useful knowledge.

But why should the burden be on investors to determine how much and how often they're getting screwed? Why must investors scrutinize not only their investments, but the people who are telling them how to invest?

The FINRA report accounts for all the familiar grievances: undisclosed fees, inappropriate trading, higher-commission house manufactured products that don't perform as well as those from third parties. These are the tools brokers use to line their own pockets, while walking the line of what's suitable for their clients. At the end of the day, that's their only guide: to not run completely afoul of their client's investment objectives.

As it stands now, too many financial service firms are handing investors a cigarette and suggesting they inhale, all the while trying to convince them that these actions are good for them.

The industry is being urged to adopt a standard of doing what's in their clients' best interest, but that has taken a winding path through Congress and ended up ... nowhere. Brokers today only have to adhere to their own code of conduct; and as the WSJ article made clear, they are more focused on best practices for sales and trading (drivers of compensation), not managing investments and advising clients.

The industry is essentially asking to have it both ways: they manufacture the products and provide the advice, but aren't liable for any of the fallout. If they don't change their ways, they may just find financial services going the way of smoking -- it's something people mostly do in other countries.