Review of Citi Personal Wealth Management

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Updated on Tuesday, May 19, 2020

Citi Personal Wealth Management is part of the larger Citigroup brand, which is well-known for its consumer banking operations. This particular wealth management division offers clients investment products and advisory services, including financial planning, through the Citigroup Global Markets Inc. (CGMI) unit.

That team employs more than 3,300 investment advisory and research workers spread across 640 offices around the country. Together, they oversee more than $32 billion billion in asset under management (AUM).

All information included in this profile is accurate as of May 19, 2020. For more information, please consult Citi Personal Wealth Management’s website.

Assets under management: $32,924,374,901
Minimum investment: Starts at $25,000 to invest with a financial advisor
Fee structure: Typically a percentage of AUM, with a maximum of 2% paid to Citi; fixed fees
Headquarters location: 388 Greenwich Street
New York, NY 10013
https://online.citi.com/JRS/pands/detail.do?ID=InvestWithPersonalAdvisor&JFP_TOKEN=AA45LHB5#
(212) 816-6000

financial advisor

Overview of Citi Personal Wealth Management

Citi Personal Wealth Management, as you may have presumed based on the name, is the wealth management arm of the Citi brand, which is known as one of the nation’s “big four” largest banks. Citigroup was created in 1998 when Citicorp and Travelers Group merged to form Citigroup. Yet the company’s roots date back to 1812, when the City Bank of New York was established.

Owned by the financial services colossus Citigroup Inc., (ticker C), a publicly traded company, the wealth management division is responsible for providing financial advisory and investment services to Citi’s many banking clients. The Citi global consumer brand serves over 110 million consumers in more than 19 countries.

Today, the wealth management unit provides its investment products and services through Citi Global Markets Inc. (CGMI). The division has its headquarters in New York City, with additional offices around the country in almost every state in the U.S.

What types of clients does Citi Personal Wealth Management serve?

The division primarily serves individuals and high net worth investors, who the SEC defines as those with at least $750,000 under management or a net worth of $1.5 million. The larger CGMI unit also serves corporations, endowments, foundations, charitable organizations, pension and profit-sharing plans and other businesses and government entities.

The minimum amount required to invest in the divisions’ low-cost robo-advisor program is $1,500. Relationships with a financial advisor typically require clients to invest at least $25,000 and as much as $100,000 or more depending on the account.

Services offered by Citi Personal Wealth Management

Citi Personal Wealth Management provides clients with ongoing portfolio management as well as a la carte financial planning services.

Portfolio management: For portfolio management, clients have numerous programs to choose from. They can tap Citi financial advisors to directly manage their portfolios, or opt for the advisors to recommend specific professional managers, including unrelated parties, to oversee their account. Clients who want guidance but prefer to be in charge of the account themselves can look to the Citi Advisor option, which is a non-discretionary program, meaning clients are in charge of all trades but still receive recommendations from advisors.

Clients interested in low-cost portfolio management can consider the digital Citi Wealth Builder program. It includes an online technology platform provided by the outside company Jemstep, and allows clients to invest in six different asset allocation models investing in cash or ETFs sponsored by Invesco. Clients do not have access to an in-person financial advisor. While the annual fee for new clients without an existing relationship with Citi is 0.55%, many current Citi clients can access the service for free.

Financial planning: Individuals and families can also tap the team for a written financial plan to help achieve specific financial goals. Topics addressed can include insurance, estate, education, retirement, tax and expenditures. This service is typically reserved for current or potential Citi clients, or individuals with a net worth of $200,000 or more. There is no fee. The plan is intended to be a one-time list of recommendations; it will not be continuously updated.

Additional services and products: Outside of the registered investment advisory services, the wealth management group also serves as a broker-dealer. Thus, advisors can place individual trades in client brokerage accounts and earn commissions per trade, although some commissions are waived for certain Citi bank customers. Advisors can also sell insurance products, such as annuities.

Here is a list of services offered through Citi Personal Wealth Management:

  • Investment advisory services/portfolio management (separately managed/wrap fee accounts; discretionary/non-discretionary)
  • Financial planning
    • Retirement planning
    • Trust and estate planning
    • Education planning
    • Tax planning and management
    • Spending analysis and budgeting
  • Insurance/risk management
  • Publication of periodicals or newsletters
  • Brokerage services

How Citi Personal Wealth Management invests your money

To guide their decision-making process, Citi financial advisors and portfolio managers have access to the bank’s internal research, including insight from their economists and industry specialists.

In general, to decide which investment managers and products to offer clients, the team relies on a combination of qualitative and quantitative analysis, evaluating factors like a company’s management team, investment process, staffing and operational issues. Performance metrics including absolute return, volatility and risk-adjusted return may be analyzed and charted.

How client money is invested ultimately will depend on the type of account the client chooses as well as the financial advisor. An advisor can create a custom portfolio for each client, based on the client’s goals, risk tolerance and time horizon. Alternatively, clients can choose from a list of recommended portfolio managers and asset allocation models, including investments like equity and fixed income portfolios, single and multi strategy and mutual funds and ETFs. Separately managed accounts are available, as well as investments in alternative funds, such as hedge funds.

Fees Citi Personal Wealth Management charges for its services

For portfolio management, clients typically pay an annual fee calculated as a percentage of their assets under management. The fee typically covers the advisory services as well as custody and transactions charged, provided that affiliated parties are used. The fee to Citi generally ranges from 0.60% to 2.00% of assets under management, depending on the type and size of the account, and the rate is often negotiable. Fees are typically paid quarterly in advance.

Clients who hire an additional layer of portfolio managers will pay an extra fee for those services, ranging from 0.10% to 1.00%. Keep in mind that clients will also pay internal mutual fund and ETF fees, as well as trading costs when another firm is used.

Financial planning is offered at no additional cost to certain current or potential clients, as well as individuals with net worths of at least $200,000. The online advisory program is also included at no cost for certain clients, or at a rate of 0.55% to new clients.

Citi Personal Wealth Management’s highlights

  • Discounts for existing Citi customers: Customers with bank accounts at Citi may be able to tap some of the firm’s wealth management services for no additional cost, such as the online advisory program or the creation of a written financial plan.
  • Large national network: The team provides wealth and investment advisory services from more than 600 offices around the country. Advisors have access to internal research by the company’s analysts, economists and other industry specialists.
  • Awards and accolades: The team has earned high rankings on reputable lists of the best advisors. For example, Citi earned 35 of the top 100 spots on the annual Bank Investments Consultant’s ranking of the Top 100 Bank Advisors List, which looked at factors including assets under management and percentage of business that is fee-based.

Citi Personal Wealth Management’s downsides

  • Potential conflicts of interest: Advisors benefit financially when clients choose a specific program or buy certain investments or products. Also, clients should keep in mind that Citibank representatives have a financial incentive to recommend clients to the wealth management division for investment services. These incentives create potential conflicts of interest as advisors may be financially motivated to make certain recommendations over others.
  • Difficult to know your fees upfront: The amount a client will be charged for portfolio management varies by advisor and type of account, and is negotiable. Thus, clients cannot determine how much they’ll pay in advance without shopping each individual advisor. If fees approach the maximum of around 2.00% to Citi, that falls at the high end of the spectrum. Average advisory fees run around 0.96% and total fees typically average 1.17%, according to a 2019 RIA in a Box study.
  • Not all advisors can offer every service: If you are interested in your financial advisor directly managing your portfolio, as opposed to recommending a professional portfolio manager, not all Citi advisors can provide this service. Only certain advisors who meet certain qualifications for investment analysis and portfolio management are eligible.
  • Disciplinary disclosures: CGMI has a long list of disclosures. See more below.

Citi Personal Wealth Management disciplinary disclosures

The Securities and Exchange Commission (SEC) requires all registered investment advisors to disclose on their Form ADV whenever the firm, an employee or an affiliate faces any disciplinary or legal actions that are material to a client’s evaluation of the advisory business or the integrity of the management team. CGMI, of which the Citi Personal Wealth Management is a part, discloses hundreds of pages of allegations against it and its predecessor firms from regulators including the SEC, FINRA, certain states and others. In many instances, the firm settled cases without admitting or denying guilt.

The company’s long list of disclosures includes issues such as:

  • In 2005, the SEC censured CGMI for failing to disclose that it provided certain mutual funds access or increased visibility on its retail distribution network in exchange for revenue sharing payments. It also failed to disclose that certain recommended mutual fund share classes charged higher fees that would negatively impact client investment returns.
  • In the late ‘90s and early 2000s, predecessor firm Salomon Smith Barney allegedly published certain fraudulent research reports and allowed investment bankers to have inappropriate influence over research analysts. The firm settled without admitting or denying the allegations.
  • From 2000 to 2003, CGMI allegedly failed to supervise certain branch offices and advisors who engaged in deceptive mutual fund market timing for certain customers. Without admitting or denying guilt, the firm consented.
  • In 2008, the firm settled allegations that it had misled tens of thousands of customers regarding the fundamental nature of and risks associated with auction rate securities that CGMI underwrote, marketed and sold. The firm allegedly led investors to believe the securities were safe, highly liquid investments.
  • In 2007, without admitting or denying the allegations, CGMI consented that it failed to deliver product descriptions and trade confirmations to certain customers who purchased ETFs.
  • In 2007, without admitting or denying the findings, the firm consented to allegations that a team of brokers used misleading materials in retirement seminars and meetings for certain employees in North and South Carolina.
  • In 2010, without admitting or denying the findings, CGMI consented to allegations that it had failed to adequately disclose certain facts to customers, among other issues, in its Direct Borrow Program.
  • In 2011, CGMI consented to allegations that the marketing materials for certain investment products with collateral consisting mostly of mortgage-backed securities were misleading.
  • In 2011, without admitting or denying the allegations, CGMI consented to allegations that it had failed to adopt, maintain and enforce written supervisory procedures reasonably designed to achieve compliance with the disclosure requirements for municipal securities transactions.
  • In 2012, without admitting or denying the findings, the group settled in response to allegations that from 2008 to 2009 certain registered representatives made unsuitable recommendations of non-traditional ETFs to customers looking for conservative investments.
  • In 2017, CGMI agreed to a settlement stemming from allegations that it had overcharged 60,000 advisory clients by the amount of $18 million, relating primarily to the TRAK fund solutions program.

Citi Personal Wealth Management onboarding process

To reach out to one of the firm’s financial advisors, potential clients can call 1-877-357-3399 or search for local Citi locations with financial advisors using the search tool on the firm’s website. Before any relationship formally begins, clients must sign a program agreement that spells out the services and fees.

Once established as a client, expect to hear from Citi through periodic performance reviews or annual check-ins during which your advisor will make sure your situation has not changed.

Is Citi Personal Wealth Management right for you?

Citi Personal Wealth Management aims to offer Citi clients investment products and wealth management services alongside the brand’s traditional banking and product offerings. Current Citi clients can look at their advisory program offerings since they may qualify for some services, such as financial planning, at no-cost, or get discounts on other services. In addition, clients looking to establish a relationship with a large bank offering a laundry list of investment options can consider Citi.

Clients will need to speak to each specific advisor to determine his or her services and fees, since they vary by advisor. And remember, fees are negotiable. You’ll also want to keep in mind the fact that Citi Personal Wealth Management does earn commissions for certain products and services, and that not all advisors can offer every service, making it all the more important to ask questions of an advisor before moving forward in your relationship.

Management Fees

0.25%

Account Minimum

$500

Promotion
N/A
Management Fees

0.25%

Account Minimum

$0

Promotion

Three months free for new customers who are referred by an existing Betterment account holder

Management Fees

0%

Account Minimum

$100 one-time deposit or $20 monthly deposit

Promotion
N/A

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