Bear Analyst Sees Continued Retail Profit Erosion.

Wall Street firms are targeting higher levels of affluent customers primarily because revenue earned on each customer is diminishing. According to Bear Stearns analyst Amy Butte, writing in a recent report on the retail financial services industry, this declining level of revenue per customer means that firms serving the mass affluent customer will be compelled to grow larger -- or steer clear of the mass-affluent customer.

"In our view, Merrill Lynch and Morgan Stanley Dean Witter represent good examples of why it is economically attractive to retrench from a previous