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Practice Management > Building Your Business

Citi Revamps Its Wealth Business

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Citigroup said Thursday that it has “unified” its institutional and retail wealth management teams to form Citi Global Wealth.

Incoming CEO Jane Fraser and current Citi CEO Michael Corbat announced the reorganization in an internal memo:  “We are going to put the full force of the firm behind this effort to create a single, integrated platform that will serve clients from the affluent level all the way through to ultra-high-net-worth individuals and households.”

The new group will be led by Jim O’Donnell, who most recently was global head of investor sales and relationship management. He has been with Citi since July 1999.

“Making wealth management a key differentiator and source of enhanced returns for Citi will be an important element of our strategy going forward, and putting the full force of our firm behind an offering in this way is indicative of the approach we’re taking to transforming our bank,” Corbat and Fraser explained.

The two groups forming the new unit are Global Consumer Banking (GCB), which services clients with at least $10,000 in assets, and the Institutional Clients Group, for those with $25 million or more in assets.

The GCB manages about $200 billion. Citi’s Private Bank  which is part of its Institutional Clients Group  has $550 billion in total client business and 13,000 clients, including 25% of the world’s billionaires.

The Private Bank has about 3,300 employees, while the GCB has a few thousand across Asia, the United States and Mexico, according to Citibank.

Morningstar senior equity analyst Eric Compton saw this move as a way to streamline the business, telling ThinkAdvisor in an email, “It’s a pretty common practice, to try to unify and streamline different teams and groups, particularly when there is product and/or client overlap,” he said.

“As these businesses develop over time, silos often develop [and the businesses become] fragmented. As a result you can often achieve some benefits from increasing coordination and communication between these groups, streamlining the products and/or sales efforts. That’s what this sounds like,” he said.

Compton added that “It’s reasonable to imagine that there might be some incremental benefits to future sales efforts from this.”

Fraser’s Rise

Fraser will become CEO in February. She is currently president and CEO of the Global Consumer Banking unit.

Before being tapped to lead that business, which includes Retail Banking and Wealth Management, Fraser led Citi’s operations in Latin America (2015-2019) and its U.S. Consumer and Commercial Banking and CitiMortgage (2013-2015).

From 2009 to 2013, Fraser was CEO of Citi’s Private Bank. Prior to that, she was the global head of Strategy and Mergers & Acquisitions (2007-2009). She joined Citi’s Corporate and Investment Banking division in 2004 after working at McKinsey & Co. and Goldman Sachs.

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