The model was ass backwards, it was not build to evolve. It was build to get big to survive not better. In the end all they had was a sales machine with more sales talent than investment talent and were hoodwinked by the smart guys.
The Goldman Model was build to evolve that's why the keep making money and the old Citi and Merrill became extinct.Go to http://www.fora.tv/ and listen to Niall Fergerson, he'll tell you how.
In the supermarket model the investment process was packaged and sold as a commodity in three sizes, small(conservative), medium( moderate ) and large (aggressive). This helped justify the existence of retail brokers and pension consultants, who guided clients through elaborate allocations between different styles. It did not encourage skillful investing.
Niall Ferguson in a lecture on FORA.TV calls it arrested evolution.
and this phase in finance as the Great Repression. Bailing out the supermarkets kept them from evolving are puts this off for another decade Citi has moved on and is now no longer the new citi is bank of america.
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