Citi Advisers Will Switch to Fee-Only, Partner with RIAs

Citi announced that financial advisers at Citibank branches will no longer provide commission-based transactions.

Citi said advisers in its retail investment unit Citi Personal Wealth Management will provide fee-only investment advisory services. “This model is where the market is headed and it will help us offer clients greater flexibility, transparency, and meaningful investment choices,” said Terri Dial, head of North America Consumer Banking and Global Consumer Strategy.

Furthermore, Citi said it will work with independent registered investment advisers (RIAs) to complement its services and cover more geographic area. The bank said it is in discussion with independent RIAs and expects to announce agreements over the next several months.

“We also expect to recruit advisers at other firms who are considering becoming independent investment advisers, as this will be an appealing alternative for many of them,” said Deborah McWhinney, head of Citi Personal Banking and Wealth Management.

As part of the shift to a fee-only business model, Citi Personal Wealth Management will also offer clients access to an open platform designed to support the fee-based business, the bank said. By 2011, Citi hopes to eliminate commission-based compensation to its advisers, transition advisers to function solely as investment advisory representatives, and establish agreements with independent RIA firms around the country.