Citigroup Abandons Client Referrals To Independent Financial Advisors
Citigroup has scrapped its plan of referring clients to independent financial advisors more than two years after 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 could not be reached to clarify details of the report at the time of going to press. Separately, Citi will issue third-quarter results today.
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.