Citigroup is rolling out tools usually reserved for the super-rich to “mass affluent” clients in Asia with assets as low as $50,000, as the US banking giant makes a fresh push for growth in the world’s most promising wealth management market.
Citi’s head of retail banking for Asia Pacific, Gonzalo Luchetti, said the lender is offering services like portfolio diversification and wealth planning to its Citigold and Citi priority customers.
Citi priority covers clients with $50,000-$150,000 of investible assets, Citigold is for those in the $150,000-$10m bracket. Both sit within Citi’s consumer bank; richer clients are served by Citi’s private bank, which is run separately.
Citi grew assets under management in its Asia Pacific retail bank by 17 per cent last year and is targeting similar growth in 2018 across the world’s fastest growing wealth market.
Its total APAC wealth management business — which includes Citi’s private bank — is the second biggest in Asia Pacific (ex China), with assets under management of $218bn, according to industry publication Asian Private Banker.
Citi’s focus on both ends of the region’s wealth market is at odds with most rival foreign banks. At its earnings call on February 14, Credit Suisse chief executive Tidjane Thiam said his bank had put ultra high net worth clients “at the heart of” his bank’s strategy, with ultras now accounting for around 75 per cent of inflows.
Global banks argue that they gain more value from the super-wealthy, since these clients are more attuned to the sophisticated products, knowledge and global diversification that they claim give them an advantage over regional rivals.
Mr Gonzalo said mass affluent clients are also interested in diversification and the global insight that Citi has “which is very hard for any local bank to replicate, they don’t have trading desks in 75 different countries”.
“Instead of talking specifically about ‘hey I have a great idea, let me talk to you about this fund’ . . . [we say] let’s talk about what you want out of your money,” he said.
He described this as “a goal based conversation, something which . . . has existed for some time in a market like the US, [but] not something which is broad based in Asia”.
Citi has begun offering what it calls a “diversification index” to mass affluent clients in some parts of Asia. This shows if they are overly exposed in certain assets, and back-tests portfolios for previous crises.
The index will be rolled out more widely this year, along with a “total wealth adviser platform” that allows relationship managers to track client portfolios in real time.
In India, Citi also launched an online platform last year that Mr Gonzalo said is “what we think is the future of advice”. It allows clients to talk via video with their relationship managers and close transactions remotely.
“Being able to say yes on your phone in one click, that has been the killer application,” he said. “In time people will move to the video. The remote advisory service is being rolled across the rest of the Asia region this year,” he added.
Mr Gonzalo believes his division can grow assets under management at double digit percentage rates over the coming years without adding material headcount because it can employ new technology. It also now has more than 80 per cent of its relationship managers based in hubs where they can pool their efforts.
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