Citigroup has scrapped its plan of referring clients to
independent financial advisors more than two years of selling control of its
Smith Barney brokerage business, according to Reuters.
Citi cut 80 of its personal wealth management investment
consultants in the US
as part of the move, the bank reportedly said in a statement. Instead, it plans
to expand the internal brokerage and wealth advisory services it already offers
and, over the next year, add 30 financial advisors to the headcount figure of
270 already employed by Citi.
The company will also expand its premium Citigold banking
accounts, a program that refers customers to the bank's financial advisors, the
report said. The bank also reportedly said it will improve financial planning,
retirement and insurance offerings, but did not give any details in its
statement, the report said.
Citi did not respond to enquiries from this publication at
the time of going to press. Separately, Citi issued third-quarter results
today, as reported elsewhere.
Citi has been attempting to reshape its retail wealth
management business over the past three years since the bank suffered massive
losses amid the 2008 financial crisis.
In January 2009, Citi sold its Smith Barney unit to Morgan
Stanley for $2.7 billion in cash and a 49 per cent stake in the resulting
Morgan Stanley Smith Barney joint venture.
In October 2009, Deborah McWhinney, who joined Citi in March
2009 after seven years heading Charles Schwab Corp's investment advisor
business, said brokers would no longer receive commissions and would become
fee-based advisors. McWhinney also started a plan to refer sophisticated
customers to outside registered investment advisors.