Hitting the refresh button as Asian wealth booms

CITI is betting big on Asia's booming prosperity as global wealth creation continues to shift East. The banking giant is exiting 13 consumer markets in Asia-Pacific, Europe, the Middle East and Africa (EMEA) as part of its recent global reshuffle, redirecting significant resources to grow its regional wealth franchise.

Citi's private bank and its consumer wealth businesses now come under the Global Wealth Management unit, serving clients more seamlessly across the wealth continuum - from the mass affluent to the ultra-rich.

The bank's strategy refresh comes as Asia's budding crop of next-generation entrepreneurs, rising personal wealth and higher trade and investment flows continue to drive demand for wealth services in this part of the world.

More than a third of the world's billionaires are already based in Asia-Pacific, with the number set to rise to 41 per cent in four years. The region will be home to almost a quarter of all ultra-high net worth individuals (UHNWIs) by 2025, up nearly 20 per cent from a decade ago.

Singapore is one of four wealth hubs for Citi globally, serving as a hotbed for Asian entrepreneurs looking to establish family offices. "Singapore is a fantastic jurisdiction for financial services, where a lot of UHNWIs feel comfortable setting up their family offices. We're seeing a lot more Chinese, Middle Eastern and Indian entrepreneurs moving here. It's also close to Indonesia and Malaysia which are resource-rich countries," says Steven Lo, co-head of Citi Global Wealth Management Asia and regional head of Citi Private Bank for Asia-Pacific.

The number of family offices in the Republic has jumped about five-fold from 2017 to 2019, with onshore investable wealth assets projected to grow substantially over the next five years.

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Ultra-rich families aside, Asia's affluent and high net worth individuals are also key wealth segments for Citi, seen as potential private banking clients over the long term.

The bank opened its largest wealth advisory hub along Orchard Road over a year ago, dedicated to serving its Citigold and Citigold Private Clients. Citigold is the starting tier of the bank's wealth continuum with a minimum requirement of S$250,000 in assets under management.

Lo observes that most individuals accumulate wealth over a long period of time. "Some are fortunate to get an inheritance right away. For the most part, we see wealth created and accumulated over time," he says.

To that end, it is crucial for wealth professionals to nurture strong relationships from the start and provide a broader range of services to ensure clients will continue to bank with Citi as they move up the wealth continuum.

"Some clients may get their company listed or sell their business when they are 50 . . . 60 years old. That's when the cash comes in. Ideally, they will ride up the ladder, all the way from a Citigold client to a private banking client," says Lo.

Although an account can be opened at Citi Private Bank with a minimum of US$10 million, on average that actual amount is about north of US$30 million.

The unification of Citi's consumer and private banking units to form a single, integrated wealth platform allows the group to pool its capabilities to offer more tailored services across the wealth continuum, says Lo.

For instance, consumer banking clients will be able to gain access to a wider range of investment products from a consolidated investments platform that serves the entire wealth continuum.

That said, it is important to note that more access does not negate the importance of suitability as a key factor in determining what products are shown to customers.

"We have to be mindful about the suitability of products because we can't advise an average Singaporean to trade options and derivatives. But we can, for example, offer less volatile hedge funds and more flexible redemption of private equity transactions involving real estate at the consumer banking level," says Lo.

As more players vie for a larger share of the region's burgeoning wealth pie, Citi's globally connected network gives it a further edge over its peers.

The bank works with one-third of billionaires globally and serves over 1,600 family office clients within its Private Capital Group. Within the private bank, the Global Client Service (GCS) is a unique differentiator that meets clients' needs beyond their home regions as they look to build a global footprint.

"A lot of significantly wealthy people see themselves as global citizens . . . not tied to one place in their outlook or their needs. We try to win their business by offering more customisation," says Lo.

GCS enables clients to easily open accounts in strategic locations across the globe, including in the global financial hubs important to their family offices.

Such international clients and their overseas family offices often have needs including real estate investment financing, geographical diversification of their investment portfolios, trust and wealth planning in multiple jurisdictions and banking for their business interests.

Through GCS, clients can access such services via a banker team in their home region, as well as be served by another banker team in other regions where they have an account in.

"The banker teams collaborate to deliver the best of Citi's global and local capabilities to meet the client's objectives. Clients with a global footprint particularly value the multi-banker coverage, efficiency of cross-region execution and access to local knowledge and expertise through the local specialists," says Lo.

Citi continues to forge ahead with its regional wealth ambitions, with plans to hire an extra 2,300 wealth staff - including 1,100 relationship managers and private bankers - and grow client assets by US$150 billion by 2025.

"We want to hire the right talent. Our extensive wealth platform offers a range of opportunities for our own staff to take advantage of, as well as those externally looking to continue their wealth management career with us," says Lo.

Across Asia-Pacific, the private bank has seen double-digit growth since 2016 and has attracted nearly US$15 billion in net new money in the first six months of 2021.

"We want to leverage our extensive platform to offer products and services that meet and anticipate our clients' needs, and in doing these two things right, fulfil our aspiration to be the bank of choice for clients no matter where they are on the wealth continuum," says Lo.

• Citi continues to forge ahead with its regional wealth ambitions, with plans to hire an extra 2,300 wealth staff - including 1,100 relationship managers and private bankers - and grow client assets by US$150 billion by 2025.
• The bank works with one-third of billionaires globally and serves over 1,600 family office clients within its Private Capital Group.
• Singapore is one of four wealth hubs for Citi globally, serving as a hotbed for Asian entrepreneurs looking to establish family offices.