Citi has initiated a new policy requiring its private bankers to systematically document interactions with clients, aiming to enhance the performance of its struggling wealth management division. According to individuals familiar with the situation, private bankers are now obliged to reach out to clients at least once every 90 days and meticulously record each discussion in call reports.
This development marks a shift for a bank that has previously embraced a more lenient stance towards remote work compared to its industry counterparts, despite also implementing stringent measures, particularly during periods of workforce reduction.
A spokesperson from Citi emphasized that improving client experience remains the top priority. The practice of gathering and sharing client feedback through documentation is not only a standard procedure within Citi but is also common across the financial industry, the spokesperson explained to the Financial Times.
However, this new mandate has not been well received by all employees. Some have voiced concerns to the Financial Times about the productivity of such a requirement, noting that it could represent an inefficient allocation of their time.
Historically, Citi has encouraged the logging of client interactions primarily for compliance purposes, without directly linking it to employee performance evaluations. This contrasts with practices at other banks, where logging calls are encouraged but not mandated.
The push for enhanced documentation and client engagement is part of a strategy introduced by Andy Sieg, who took the helm of Citi’s global wealth unit in September, arriving from Bank of America. Sieg has communicated to staff his ambition to augment the sale of investment products and manage client assets on a fee basis.
Citi CEO Jane Fraser, in a memo from March 2023, identified the expansion of the wealth management division as a fundamental aspect of the bank’s strategy, aiming to diversify its revenue streams through increased fee-based earnings and thereby boosting overall returns. However, Fraser acknowledged to investors that the wealth management sector has not yet met its potential.
The financial performance of Citi’s wealth management has been underwhelming, with a 3% decline in wealth revenue year-over-year in the fourth quarter, and a more pronounced 10% drop in private bank revenues during the same period, as reported in the bank’s recent earnings statement.
As Citi navigates through these challenges, it is undertaking a comprehensive reorganization of its management and operations. This restructuring aims to eliminate redundant layers of management and consolidate overlapping roles. The bank is also in the process of divesting certain business segments and reducing its workforce, anticipating up to $1 billion in severance and restructuring expenses for the year.
Following a strategic overhaul, Citi’s business model now segregates personal banking and wealth management, with the latter serving as a key component of the bank’s new organizational framework.
