Citigroup’s reorganization of its private bank and Global Wealth Management division, announced Tuesday, will absolutely not force advisors into silos based on client wealth, said Sallie Krawcheck, Chairman and CEO of Citigroup's Global Wealth Management division, in an interview Wednesday. The reorganization of Smith Barney and the private bank into four separate units according to wealth (institutional, ultra high net worth, high net worth and emerging affluent) is purely a management move, she said, and is intended to help the firm serve these wealth segments better.
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The reorganization is also intended to allow Smith Barney advisors and private client bankers to work together more seamlessly. “Before the opportunities for collaboration [between Smith Barney and private client advisors who shared clients] weren't there,” said Sallie Krawcheck. “Because management decisions had to go all the way up to me. Now bankers will get all the capabilities of Smith Barney and vice versa. Also, for a long time our emerging affluent clients were treated as junior high net worth clients. But we want to target them more specifically."
Smith Barney advisors had voiced concerns that they would be forced to give up some clients after the firm announced its plans to reorganize Smith Barney and the private bank. The announcement, made in an internal memo sent to Citi employees, came as some investors and analysts have been calling for Citigroup to spin off Smith Barney.
Under the new arrangement Smith Barney advisors and private bank advisors “will partner more closely than ever before, enabling FAs and bankers to collaborate and deliver the capabilities of global wealth management and Citi to our clients,” says a Citi spokesman. Charlie Johnston, current President and CEO of Smith Barney, will become the head of the newly reorganized wealth management unit in the U.S. and Canada.
Currently, there are a lot of redundancies in infrastructure between Smith Barney's family office group (CFO) and its private bank that don’t make sense, says the spokesman. Both groups provide similar services to clients.