Citgroup is hoping to steer financial advisor compensation toward the firm’s shareholders as the company starts hiring FAs for its newly merged wealth management unit, according to news reports.
“It’s a business where a lot of money is given out in compensation models,” CEO Jane Fraser said on Friday during a virtual investor conference, according to Bloomberg. “If you have a superb value proposition and an incredible platform, you’re able to give more of that money back to shareholders as you divide the pie up.”
She didn't elaborate on how Citi plans to achive achieve that. The wealth-management industry has been moving away from commissions and toward a fee-based compensation model, Bloomberg writes.
Citigroup also plans to push its wealth management offerings to customers of its commercial bank, which operates in 30 markets worldwide, the news service writes.
“You know, the UBSs don’t have that, the Credit Suisses don’t have that, the JPMorgans don’t have that, the local banks don’t have that across the different geographies,” Fraser said, according to Bloomberg. “We’ve got the capabilities.”
At the same time, Fraser said that Citigroup’s lack of an asset management unit is an advantage it has over competitors such as Goldman Sachs, Morgan Stanley and JPMorgan Chase, which do, according to the news service.
“So I’m not trying to push my own products at the clients to maximize manufacturing revenue,” Fraser said, according to Bloomberg. “I’m just trying to serve the clients well.”
Fraser said in January that Citigroup would make significant investments in its newly unified wealth management unit, Citi Global Wealth, created by merging Citigroup’s consumer wealth management and private bank into a single business division, as reported. The firm also appointed Jim O’Donnell, previously global head of investor sales and relationship management, to lead the new unit.
In April, Citigroup also named Ida Liu, who had led the private bank in North America, to the role of global head of private banking, and Running Du, previously a member of Citigroup’s corporate strategy team, to chief of staff for the new unit.
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