The news that Citigroup is considering selling half its Smith Barney brokerage unit to Morgan Stanley is seen as evidence that Sandy Weill's plan for a one-stop financial shop is officially dead.

But the financial supermarket is the bad idea that just won't die.

It certainly makes sound sense on paper: let customers get all their banking needs from one financial institution. Credit cards, checking accounts, mortgages, brokerage services, insurance — keep it all under one roof. Cross-sell to your heart's content. Sell mortgages to your brokerage customers and offer to underwrite deals for your corporate bank customers.

During the 1990s, Weill commandeered his own financial merger frenzy, combining his Shearson Lehman brokerage with Travelers Group, Aetna Life & Casualty, and Salomon Brothers before eventually merging it all in a megadeal with Citicorp in 1998.

But Citigroup was never able to get the one-stop shopping to work. The firm, bloated by its consolidated income statement, has never been able to overcome its unwieldy size, despite its numerous attempts to start over. Weill was replaced as Citigroup C.E.O. in 2003 by Chuck Prince, who was ousted more than a year ago and replaced by Vikram Pandit. Now, as rumors swirl that Citigroup might finally break itself up, Pandit is desperately clinging to the job as the head of the bank that seemingly can do no right.

But even as Wall Street witnesses the collapse of the financial supermarket at Citigroup, other bank executives seem all too eager to attempt it themselves.  

Bank of America has laid the groundwork to become the Wal-Mart of financial supermarkets. It's in the process of integrating Merrill Lynch's thundering herd with its massive retail bank, which is also still absorbing the embattled mortgage lender Countrywide. Wells Fargo expanded its retail banking presence with its Wachovia acquisition, but it also got a full-scale investment bank and the brokerage unit A.G. Edwards with its purchase.

Cross-selling, it seems, has never been so promising.

But, why? There is little evidence it works, as Bloomberg reported last week in a story about the bitter divide between Bank of America bankers and Merrill Lynch brokers. “On paper, cross-selling makes a lot of sense, but in reality, I’ve never seen it work,” Friedman Billings banking analyst Paul Miller said.

And after the sting of Madoff, the hangover from the mortgage crisis, and the lingering foul taste of Lehman and Bear Stearns, why might customers be more inclined to trust one financial institution for all their needs?

The fact is they won't. But if a Smith Barney-Morgan Stanley deal does spark a new wave of financial mergers as some predict, they won't have much choice in the matter.