Citi Personal Wealth Management is shifting its investment advisory model to a fee-only service and plans to work with registered investment advisers in an effort to broaden its geographic coverage, the company announced today.
The company plans to eliminate commission-based compensation by 2011, while also transitioning Citi Personal Wealth Management advisers to function solely as investment advisory representatives.
"Citi is in advanced discussions with some of the nation’s top independent RIA businesses and expects to announce agreements in select markets in the near future," said Deborah McWhinney, head of Citi Personal Banking and Wealth Management.
"Over the next several months, we will announce the formation of Citi Personal Wealth Management Investment Advisor teams comprising many of our top in-house financial advisers. We also expect to recruit advisers at other firms who are considering becoming independent investment advisers, as this will be an appealing alternative for many of them," McWhinney said.
McWhinney has contacts throughout the independent RIA community owing to her past position as head of Schwab Institutional, the largest custodian for independent RIAs.
Clients will be able to work with a team of Citi's own investment advisers — who will act as fiduciaries — or they can work with Citi Personal Wealth Management’s National Investor Center where they can choose securities or advisory products "on a self-directed basis or after seeking advice from a 'coach-on-call.'"
Terry Dial, head of North America Consumer Banking and Global Consumer Strategy, said the investment advisory model "is where the market is headed and it will help us offer clients greater flexibility, transparency and meaningful investment choices."
