(Dow Jones) Lloyd Blankfein's support of a fiduciary standard for retail brokers now seems like nothing more than a bone thrown at financial reformers.

The chairman and chief executive of Goldman Sachs Group Inc.(GS) got some attention in January when, appearing before the Financial Crisis Inquiry Commission, he said he supports a fiduciary standard for brokers who provide advice to retail investors.

In a brighter spotlight Tuesday before a Senate subcommittee, Blankfein and some of the executives who answer to him made clear the shallowness of that support in the context of Goldman's largely institutional business model.

Putting the interests of Goldman's clients ahead of the firm, at least in big-money derivatives transactions that are now getting close scrutiny, doesn't appear to be part of the firm's ethos.

The Securities and Exchange Commission has filed civil fraud charges against Goldman Sachs and one of its traders, Fabrice Tourre, for allegedly misleading investors about financial products tied to subprime mortages. Goldman failed to inform investors that a hedge fund betting against those products was instrumental in their design, the SEC said. Goldman Sachs and Tourre deny there was any fraud.

In his appearance before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee on Tuesday, Blankfein was asked repeatedly how Goldman could sell financial instruments to clients while sometimes taking opposite positions for its own books. He replied, "I don't think our clients care or they should care."

Tourre told the same panel that he didn't see himself as an investment adviser, and described the clients involved as sophisticated institutions, suggesting they were capable of looking after themselves without his advice.

Tourre and three other Goldman executives involved in mortgage-related products were asked directly if they thought they had a duty to act in the best interest of clients. Only one, Josh Birnbaum, former managing director of Goldman's mortgage department, answered the question head-on. "Not only do I believe that we do, I believe that we did," he said. Birnbaum left the firm in 2008 to start a hedge fund.

Leaving even so-called "sophisticated" investors to ferret out unethical and possibly illegal behavior on Wall Street threatens the safety of all, including retail investors, says Barbara Roper, director of investor protection for the Consumer Federation of America, an advocacy group.

"Average, everyday investors have an interest in seeing enhanced protections for even the most sophisticated players on Wall Street," she says. "This time, they nearly took the rest of us down with them."

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