Business Blog: Hoover’s Business Insight Zone

I’ve been meaning to post about this column, which recaps the 1980s-era spate of Wall Street innovation on behalf of middle-class investors, then decries the way that Wall Street now seems to have abandoned these same customers — or has, at least, left them much more to their own devices.

Wall Street doesn’t want you

. . . even the stunning size of these [recent] losses [e.g. at Citigroup] is not going to turn Wall Street’s attention back to the individual investor or saver. The best minds of Wall Street are going to continue to put their time and effort elsewhere, because Wall Street is still convinced that’s where the money is. Investors with a few hundred thousand or even a few million in assets, even if that represents the work of a lifetime, can’t expect more than a passing thought from the giants of finance.

That’s so profoundly wrong that it makes my hair — what remains of it — stand on end. That Wall Street would want to abandon financial innovation for the middle class just as the baby-boom generation hits its peak earning and saving years is beyond comprehension to me. And that it would call quits to a revolution in financial services and products for the middle class just halfway through signifies a profound failure of imagination.

Maybe Wall Street is just too intent on building ephemeral empires such as Citigroup and Bank of America (BAC, news, msgs) to care about these opportunities. But not everyone can be Goldman Sachs, nor should everyone aspire to.

Jubak’s suggestions for what financial services companies could be doing for middle-class customers are interesting, even if I differ with some of his points of focus. (E.g., I’m not sure how banks would help workers whom the global economy renders “permanently unemployable.”)

Bigger picture: there’s always room for innovation, and not just in the obvious areas (telecom, biotechnology, computing), but in all areas of business. It would be great if the financial services giants woke up from their collective/risk hangover and decided to serve the middle-class market better.