The New York Times raises an important question facing Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER) -- is the financial supermarket -- an idea pushed by former Citigroup CEO Sandy Weill -- an idea whose time is past? I think it's time to kill this failed concept -- it's bad for customers, employees, and shareholders.

Twenty-five years ago, I won a competition at the consulting firm where I worked to advise an insurance company about how it should respond to the financial supermarket idea. Back then, Sandy Weill had taken his brokerage firm -- Shearson -- and merged it with Lehman Brothers (NYSE: LEH) and ultimately American Express Co. (NYSE: AXP) to create a company where someone could get all their personal financial needs taken care of under one roof. My job was to find other companies that this insurance company could buy to implement the financial supermarket concept.

But the financial supermarket is a non-starter from the customer's standpoint. It doesn't even work inside the institution where it's housed. After Sandy Weill got kicked out of American Express, he tried to rebuild the concept from scratch -- starting with Commercial Credit and extending to Travelers Co. (NYSE: TRV) and ultimately merging it all together into Citigroup. This is all well described in Amey Stone's King of Capital.

Continue reading Memo to Citigroup and Merrill: It's time to kill the financial supermarket

Memo to Citigroup and Merrill: It's time to kill the financial supermarket originally appeared on BloggingStocks on Mon, 05 Nov 2007 10:22:00 EST. Please see our terms for use of feeds.