Citigroup has launched a robo-advisor, joining the ranks of other big banks and brokerages who already offer a digital advice product.
Citi Wealth Builder has an account minimum of $1,500 and a 0.55% fee, but investors with a Citi Priority account, which requires a minimum balance of $50,000 in deposit, retirement and investment balances, or a Citigold account, whose minimum balance is $200,000, pay no advisory fee. Underlying ETF management fees range from 0.18% to 0.24%.
Jemstep built the Citi Wealth Builder platform, which will match customers to one of six portfolios based on their risk tolerance, retirement goals and current savings. Clients can adjust their investments as goals and tolerances change and access support online or via the Citi Mobile App 24 hours a day. Their accounts will be automatically rebalanced.
“In just a few minutes, customers can start building a solid foundation for years to come,” said John Cummings, head of Citi U.S. Consumer Wealth Management, in a statement.
David Goldstone, head of research for Backend Benchmarking, which publishes the Robo Report and Robo Ranking, noted that Citigroup is “one of the last major U.S. banks to launch a digital advice service,” already offered by JPMorgan Chase, Wells Fargo, Bank of America, U.S. Bank and Morgan Stanley.
Goldstone said the 0.55% account fee is higher than many of Citi’s competitors but noted that the account is free for any Citi customer with $50,000 in investors or deposits at the bank.
“Low-cost robo advice is now table stakes for major financial firms,” Goldstone said. “Firms who do not introduce wealth management early may run into client pipeline issues as many investors will have an existing relationship in place by the time they are wealthy enough to be attractive to a traditional advisor.”
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