And with the rise of this 0.01 per cent, one thing is clear: Even on Wall Street, the divide between the privileged few and everyone else is growing -- and fast. 'Rude awakening' "It's a rude awakening when you find out that research isn't readily available" from Wall Street banks, said Jeff Sica, who oversees about $US1.5 billion as the president of Circle Squared Alternative Investments in Morristown, New Jersey. Scott Helfman, a Citigroup spokesman, said the bank doesn't comment on its relationships with clients, while Morgan Stanley's Tom Walton declined to comment. HSBC said in a statement that it's "reducing the number of dormant and low-revenue clients" to help the firm build a more sustainable business. Whether it's in equities or fixed-income, the shift in priorities is undeniable.

Morgan Stanley now ranks its most-profitable European fixed-income customers in three groups -- "supercore," "core" and "base," said people familiar with the matter, who asked not to be identified because they aren't authorised to speak publicly. Everyone else -- about 2000 firms in total -- has limits on their access to the company's management, sales and research departments. 'Blackjack list' At HSBC, about half of its 3000 financial institution customers across the currency, debt, equity and trade finance businesses have been cut in the past 18 months, a person with knowledge of the matter said. Europe's largest lender also created a group of less than 200 institutional and other financial clients that are its highest priority. Even smaller banks have come up with their own client lists targeting a select number of investment firms, with Stifel Financial dubbing a roster of 21 top-tier targets as its "Blackjack" list. Chief Executive Officer Ronald Kruszewski, whose firm bills itself as the biggest provider of equity research in the US, said in an interview that his equity sales unit had compiled such a list about three years ago, but that it's currently not in use. "I would be surprised at any firm that is trying to sell a product that didn't have a list," Kruszewski said.

In some ways, the banks have little choice. In the post-crisis world of stricter regulations and rock-bottom interest rates, banks are struggling to boost profitability. Income that commercial banks get from making loans has slumped, while new rules have made it much harder to earn easy money from trading bonds, currencies and commodities - - long the biggest source of industry profits -- by curbing the firms' risk-taking and forcing them to hold more capital. Little choice At the biggest investment banks, revenue from fixed-income sales and trading fell to $US61.8 billion ($82.4 billion) last year, the fifth decline in six years. While Wall Street ultimately eked out a record year of earnings by slashing jobs and cutting costs, most firms failed to generate a return on equity of at least 10 per cent -- a key measure of profitability. Things haven't been much better in 2016. In the past month, both Citigroup and JPMorgan Chase warned total first-quarter trading revenue will drop. Credit Suisse CEO Tidjane Thiam said Wednesday the bank will be "more selective on client coverage" after incurring losses tied to fixed-income trading positions.

"Everyone is talking about how you go about" boosting profitability, said Greg Braca, head of US corporate and specialty banking at TD Bank. "Banks are going to very much cherish their house accounts and core clients." Top payers At Citigroup, that's meant catering to the big hedge funds that consistently trade more than anyone else, said the person familiar with the bank's internal practices. This year, the bank winnowed its favoured list to fewer than a hundred to devote more attention to its top-paying clients and discouraged analysts from spending time on anyone else, the person said. The analysts have quotas to ensure they keep in touch regularly. They must track their progress on a spreadsheet. To make the cut, firms typically need to generate at least $US2 million annually in equity trading revenue with the bank. Though precise numbers are hard to come by, the "Focus Five" shops may trade multiple times that amount. The hedge-fund firms, which held roughly $US120 billion of US stocks at the end of last year based on filings compiled by Bloomberg, are some of the biggest and most well-known in the business. 'Focus five'

They include: Israel Englander's Millennium, a multi-strategy manager known for making millions of trades a day and picking off tiny profits from each; billionaire Ken Griffin's Citadel empire, whose market-making business is one of the US stock market's biggest automated traders; Point72, which oversees the personal fortune of billionaire Steven A. Cohen, who once captivated Wall Street with an almost preternatural knack for reading the markets while running SAC Capital. Carlson Capital, the Dallas-based hedge fund founded by Clint Carlson, who helped manage the Texas oil fortunes of the famed Bass brothers, and Surveyor, a separate Citadel hedge-fund unit that trades equities across 29 teams, round out the group. Representatives for the hedge funds declined to comment. And it's not just equities. Citigroup keeps lists of accounts across its businesses, some ranked by assets, others by trading volume, said another person with knowledge of the bank's internal practices. The company identifies favoured clients by "platinum," "gold" and "silver" status. On the credit research desk, a priority list includes the fund managers BlackRock, Fidelity and Franklin Resources. At Morgan Stanley, the firm's European list of "supercore" clients includes BlackRock and Pacific Investment Management, the people familiar with the matter said. The bank began analysing its client base in 2012 and looked at every interaction its sales team had with customers, from instant messages to phone calls and meetings. They found about 75 per cent of revenue came from roughly 25 per cent of clients, the people said.

While providing the top-paying funds with the best service is well within the rules, the various rankings and methodologies highlight just how far banks are willing to go as they shift toward a model that relies exclusively on a small number of clients. 'Dog-eat-dog world' "If you want to sit down and talk to an analyst or strategist, clearly the biggest clients are the ones that get first cut," said Voya Investment Management's Paul Zemsky, referring to prevailing Wall Street practices. The head of multi-asset strategies at Voya helps oversee $US210 billion. One money manager, who asked not to be identified for fear of reprisals, says she doesn't even bother calling up top analysts at the major banks. She's come to understand that her firm doesn't have the pull to get her calls returned, even though it oversees billions of dollars. Some say it's just the reality on Wall Street, where banks are under pressure to restore profitability in a business that's become increasingly regulated over the past 15 years. That makes favouring their best clients a no-brainer.

"It's a dog-eat-dog world," said Kevin Kelly, the chief investment officer at Recon Capital Partners in New York. "It's tough but that's just how it works." Bloomberg