If you've been waiting for evidence of any concrete synergies between Salomon Smith Barney and its adoptive parents at Citigroup, SSB co-head of retail Jay Mandelbaum says he has the documentation. Specifically, SSB's financial consultants have delivered nearly §500 million worth of Citibank loans, mortgages and other lending products over the past six months, a period in which Citibank has been familiarizing producers with lending products and services.
"One of the things that's nice about the Citigroup merger is that it affords us an opportunity to take what we believe is already a full-service product line and make it even broader," Mandelbaum told RR during an interview with company execs at the end of July.
About two-thirds of the SSB retail sales force has been familiarized with Citibank's lending opportunities so far, and the response has been "tremendous," Mandelbaum says. In fact, more than half of all the mortgages sold by SSB brokers today are Citibank's Preserved Asset Mortgages--a mortgage that gives qualified SSB clients 100% of the amount they need to buy a second or third home.
Over the past six months, SSB has also been introducing its brokers across the country to some of the lending products offered by Citibank Private Bank, Mandelbaum says. SSB's producers can offer customized private banking services to clients with assets of §1 million or more at the firm.
"We are putting Private Bank lending specialists out in the field to train our financial consultants, and we also have a department in New York that can support other regions," Mandelbaum says. In addition the firm is testing a program in New York and three other major cities to encourage brokers to introduce superaffluent clients to their own personal Citibank private banker.
Meanwhile, Citibank's trust company and the Smith Barney Trust Co. are in the process of merging. Citibank's trust unit has always offered a more robust array of products, Mandelbaum admits.
One SSB producer agrees, saying SSB brokers have been losing trust business to local banks with solid reputations. But the broker wonders if private bankers are as much competition as they are an asset. The rep worries that private bankers at Citibank will end up doing the same things brokers do, such as recommending money managers.
Despite the Citibank merger, SSB remains as "entrepreneurial" as ever, retail execs insist. For example, SSB doesn't pressure reps to push in-house products or to convert to fee business, says Paul Underwood, co-head of retail. "There's room here for everyone."
Management points to the fact that about 80% of the firm's brokers are also owners, buying company stock at a 25% pretax discount through its Capital Accumulation Plan. "They think like shareholders, so they tell us how to make this business better," says retail co-chief Jay Mandelbaum.
SSB's retail division is structured to encourage an entrepreneurial atmosphere, placing emphasis on local management, say the retail chiefs. Each of the firm's four divisional directors oversees six regional directors, who are each responsible for visiting 15 to 20 branches at least once a quarter--enough to keep brokers informed.
But don't mistake an entrepreneurial spirit for anarchy. "This is a very disciplined organization," says National Sales Director Tom Matthews. "We like control."