U.S. financial giant Citigroup Inc. is shifting its branch-based advisors away from commission-based businesses and towards providing fee-only investment advice, the company said Monday.
Citi announced the strategic shift for the retail investment business of Citi Personal Wealth Management, which will field investment advisors who will act as fiduciaries, charging a fee for advice based on assets instead of commissions. Clients can also work with the division’s National Investor Center where they can transact on a self-directed basis or after seeking advice from a “coach-on-call”.
The firm said that it will also be working with independent Registered Investment Advisors to complement its in-house expertise and broaden its geographic coverage. “Citi is in advanced discussions with some of the nation’s top independent RIA businesses and expects to announce agreements in select markets in the near future,” said Deborah McWhinney, head of Citi Personal Banking and Wealth Management.
“Over the next several months, we will announce the formation of Citi Personal Wealth Management investment advisor teams comprising many of our top in-house financial advisors. We also expect to recruit advisors at other firms who are considering becoming independent investment advisors, as this will be an appealing alternative for many of them,” she said.
Citi Personal Wealth Management will begin its strategic shift immediately with the formation of advisor teams in key markets across the country. As part of the strategic shift, it will also offer clients access to an open platform designed to support the fee-based business. The ultimate goal is to eliminate commission-based compensation to its advisors, transition its’ advisors to function solely as Investment Advisory Representatives, and establish agreements with independent RIA firms around the country by 2011.
“Moving to an investment advisory model is the right decision for our clients and for Citi. This model is where the market is headed and it will help us offer clients greater flexibility, transparency and meaningful investment choices,” said Terri Dial, head of North America Consumer Banking and Global Consumer Strategy.
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Citi shifts wealth management group to fee-based model
Firm will be working with independent advisors to broaden its geographic coverage
- By: James Langton
- October 5, 2009 October 5, 2009
- 16:39