Citigroup is giving its wealth management business a makeover, announcing this week that instead of referring its bank customers to independent advisors it will expand its own retail brokerage and wealth advisory services.
Citi plans to add at least 30 more advisors over the next year, bringing its total advisor headcount to roughly 300, company official said in a statement Thursday.
Citi has eliminated the role of investment consultant, a decision that will mean pink slips for 80 employees who were intermediaries between the bank and the registered investment advisors, according to a Dow Jones report.
“These plans, which were put on hold earlier this year, will no longer be pursued,” Citi said in its statement. The bank will help the affected employees to find other jobs within Citi.
The consultants were working in Citibank branches and were part of Citi's goal to grow wealth advisory after divesting its Smith Barney brokerage business, Dow Jones reports. In 2009, former Charles Schwab executive Deborah McWhinney shifted Citi's wealth advisers who weren't part of the Smith Barney divestiture from a commissions-based advisory model to fee-based; now Citi offers both options.
Initially, Citi planned to give customers the option to choose between Citi advisors and independent advisors but, even though it had some conversations with RIAs, the plan never came to fruition.