Not cost effective.
Partly a legacy of being able to book as non-seg and use these monies for hedging at the clearer but also simply because it is not cost effective to be setting up individual bank accounts for each customer. Most new accounts come to nothing so set up costs must be minimal.
There is another reason that may impact some brokers. There was a grey area post the MiFID rules on segregating client funds that client funds could still be used for margin purpose at the clearers if the clearers held these funds on a segregated basis. I believe at least 2 firms looked at this route (maybe went down it) after the decimation of the balance sheets from bad debts and book losses meant they had too small a balance sheet to fund the hedging requirements of the client funds.
It also sounds like you have appreciated the potential risk of pooled funds, even if Seg? If you have a small broker who's pooled account is comprised of 99% retail punters and 1% 'whales' then if the whales' funds are large enough then their default could eliminate the 99% of retail funds in the same account?
For these types of firms with an imbalance of customers the sensible option is to run more than one pooled seg account and formally separate whales and institutional business from genuine retail.
