DealBook reports that Frank Quattrone, the former First Boston high tech banker who spent four years fighting charges of obstruction of justice, is trying to change the role of analysts on Wall Street to make them glorified sales people for small, high-tech company IPOs.

That's what they were for Quattrone and they helped make him wealthy. But thanks to people like former Merrill Lynch & Co., Inc. (NYSE: MER) analyst and current Silicon Alley Insider blogger Henry Blodget, who famously trashed companies in e-mails to colleagues while boosting them in his reports, the role of Wall Street analysts has been permanently transformed. They can no longer get paid out of investment banking revenues. Instead, their compensation comes from trading revenues. And analysts are not supposed to talk to bankers unless a lawyer is present.

Quattrone makes two good points though. First, there is no career upside for analysts to cover small companies. That's because only the big companies can generate the trading or banking revenues needed to pay the analysts. Second, the most talented analysts went to work for hedge funds and private equity firms. The result is that individual investors can't get analysis for free. Quattrone fails to point out that the quality of that analysis is worth what individuals pay for it -- nothing directly and a modest sum indirectly (through trading commissions).

Analysts get a tremendous amount of information about companies they cover. Their insights are quite valuable and they tend to go to the firms that pay the most trading commissions. But this just creates a kind of legal inside information that analysts share with customers who have the biggest accounts. Sharing those insights is valuable to investors and they should pay for it.

The problem for Quattrone is that it's very difficult to have a functioning high-tech IPO market without analysts who can explain the pros and cons of small companies to investors. The solution, in my humble opinion, is for analysts to charge a fee based on their time. If investors want to pay for that, they can do so. If not, they don't have to. Analysts who can't support their overhead go elsewhere. Those who get investors to pay their fees end up making a bundle.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.