INTERVIEW: Citigroup Aims To Enhance Wealth Business With Wharton Training Programme

Tom Burroughes

26 October 2015

Citigroup’s new wealth management education initiative with the Wharton School is another twist in the story of how some firms in this sector are trying to raise their talent management game and do so to win and retain more clients. And significantly, the programme launched by these institutions kicks off first in mainland China as well as the US. If you want to make a big impression, it seems, you need to get the launches done in Asia.

Enhancing the quality of relationships between client and relationship manager is one of the chief benefits expected to come from the programme, Amit Sah, head of retail and cards, including wealth management, in Citi's EMEA consumer business, told this publication recently. (The wealth management business caters to mass affluent and high net worth individuals - not ultra HNW individuals, who are served by Citi’s private bank.)

The Citi Wharton Global Wealth Institute aims to provide the bank’s global advisor community with business and executive training and an intake of around 500 RMs – around 10-15 per cent of the total working at Citi – are due to enter the programme, which lasts for three years, Sah said. The Citi Wharton Global Wealth Institute’s curriculum will be led by Christopher Geczy, academic director of the Wharton Wealth Management Initiative. (See here for the original story.)

“Wealth management is becoming more complex and it is not only about product selling now. Many players are exiting the lower end of the affluent space because of the costs of training ….there is a huge investment in people and in doing business,” Sah said. “Any bank or other institution that wants to stay in the space has no choice but to train people better.”

“The objective is to produce people who are highly competent and able to build on relationships with clients; the improvements in productivity – and revenue generation – are natural benefits that we will derive as well,” he said.

Net promoter score
Sah did not give out other specific targets for the programme but said one benefit should be an improvement in customer advocacy of Citigroup’s wealth offering as measured by the net promoter score (NPS). Citigroup derives the NPS on a scale of one to 10, where nine or 10 means the customer is a net promoter for the bank and between one and six means he or she is a net detractor; the net figure is arrived at when subtracting clients’ promoter score from detractor score. In other words, the hope is that the training work means clients are more likely to stay with the bank and recommend it to others.

A number of banks have training programmes of different types for staff (there is a list that can be viewed of various courses here), with firms such as UBS, Credit Suisse and BNP Paribas, among others, engaging in such activity.

The shortage of trained RMs, given the rising complexity of the industry, remains a talking point in wealth management. This publication has been told on numerous occasions that there is a need to keep pace with demand for private bankers and other wealth managers. Consider Asia: Credit Suisse, for example, said earlier this year that there are an estimated 7 million millionaires in the region. On the assumption that a banker can on average handle 35 clients, that would translate into a need to have 200,000 private bankers. But at the moment there are only around 10,000 such people.

Citigroup’s Sah said that the investment of time and resources into RM training and development will not just improve client relationships, but strengthen employee loyalty to the bank over the long term. And the association with a renowned business school such as Wharton doesn’t do any harm either in encouraging students to think about wealth management as a career.

This publication asked Sah what is the situation with RMs who are not chosen for the course and whether they might be demotivated. Sah replied: “The selection of RMs for this programme is on merit-based criteria which is similar to other merit-based rewards and recognition programmes. All RMs are familiar with this underlying philosophy of performance management and understand that they have an opportunity to improve and join the select group in future.”