Facilitating borderless wealth with Citi's Global Client Service

THE ultra-wealthy are becoming more borderless in their investments and asset acquisition, as they seek growth and wealth preservation opportunities locally and internationally. These clients increasingly want their bankers to be there for them across the globe.

Citi - which counts around a third of the world's billionaires as its clients - is eyeing growth from this segment, as it aims to provide solutions for the growing number of high net-worth individuals (HNWIs) that have business and assets beyond their home regions.

"We are seeing new patterns of wealth management because of the global expansion of the family, business and wealth footprints of such clients," says Money K, global head of Global Client Service (GCS), Citi Private Bank.

The globalization of wealth is a phenomenon that is likely to grow exponentially. This is also driven by families who are expanding their horizons, as new family offices are being set up to manage assets both locally and abroad. Many wealthy families are also growing their family businesses internationally with their next generation living and working overseas.

Various market studies estimate that some US$15 trillion in assets is expected to be passed on to the younger generation in this decade, in what has been dubbed as the "Great Wealth Transfer".

"This generation who are now in their 20s and 30s tend to have a more international mindset than their parents. Some have ventured into startups, raised capital, listed companies and have become independently wealthy. Others are transforming their family businesses into multi-jurisdictional enterprises. For them, having access to a global bank is a critical necessity," Money says.

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Citi - which operates in 95 countries and serves over 1,600 family office clients - sees the global identity of its business as a core advantage that clients can tap on.

"Their next generation are working and living overseas, and their family businesses are extending their reach. Hence the rapid growth in demand for the global client service," Money adds.

The private bank serves clients with a net worth of over US$10 million, and the GCS unit focuses on the needs and aspirations of clients as they take their wealth across international borders.

GCS brings together an international coverage team working collaboratively to serve the clients' needs locally, which may be in New York, Los Angeles, San Francisco, Miami, London, Geneva, Luxembourg, Dubai, Singapore or Hong Kong. A primary relationship manager, in the client's home region, orchestrates the global coverage team of bankers and specialists.

"Many of our clients are drawn by Citi's global footprint as they have family members living overseas, their businesses are regional or global, and they own assets such as commercial and residential real estate internationally," Money says.

He notes that some clients had previously used different institutions in various countries but found it difficult to manage their wealth and banking relationships holistically.

"An important benefit of GCS is the ability for our clients to have a consolidated view of their accounts across jurisdictions. This empowers them to make better decisions," Money says.

For one Singapore client with a US resident son, the ability to open accounts in Singapore and the US proved essential.

The client had been unable to find a bank that provided solutions across the two regions. Citi helped the client open accounts in Singapore and the US and implemented a wealth planning solution that included trust services, insurance and investments.

"Citi provides a one-stop solution for clients' personal and business needs covering investments, banking, lending, insurance, and trust and estate planning," Money says.

"We have even provided advisory and financing services to clients acquiring professional sports clubs, private jets, or fine art."

In another instance, an Australian billionaire entrepreneur switched to Citi's services due to its network between Singapore and the US.

"We won his business on the strength of collaborative dual banker coverage in Singapore and in the US," Money says. "In a recent transaction, we cross-collateralized his investment portfolio in the Singapore account to extend a credit facility in the tens of millions in his US account."

Apart from individual clients, GCS also provided services for a multi-family office allowing its clients to receive wealth management services across multiple jurisdictions.

Money adds that they are increasingly seeing demand from wealthier clients for institutional services, such as corporate and investment banking and capital markets solutions from trading floors in almost 80 countries.

For example, the GCS unit has helped some Asian clients, who are founding directors of listed ADRs in the US, secure financing against their holdings in their respective companies. The funds were used for investing or real estate acquisition to diversify and de-risk their personal wealth.

"Within Citi - the Institutional Clients Group - provides services, which are typically reserved for the world's largest institutions," he says. "The combination of private banking and institutional capabilities form a powerful proposition for the world's wealthiest clients."

With more clients seeking solutions across borders, GCS has been growing rapidly.

"GCS is, perhaps, our most compelling competitive differentiator. Such global clients number less than 2,000 but they account for about 25 percent of the private bank's total global revenue," Money says.

"We expect the number of global clients and their respective contribution to the private bank's bottom line to only grow, probably by significant strides."