Dive Brief:

• Andy Sieg, Citi’s head of wealth, suggested Wednesday the bank isn’t done poaching talent to bolster its wealth segment, as Citi aims to rev up growth in that business.
• “We’ve got a few key roles that are still open today,” Sieg said during a Wednesday appearance at a Morgan Stanley conference. “This business is a magnet for talent street-wide right now.” 
• When Morgan Stanley analyst Betsy Graseck asked if there have been any regretted departures amid the New York-based bank’s massive overhaul, Sieg said “there’s been very few.” Given how the wealth business has struggled, “I don’t think it should surprise anybody that we’ve needed to drive significant change across the team,” he said.

Dive Insight:

On Wednesday, Citi announced two new leadership appointments in the wealth business: Kris Bitterly, who has been the bank’s head of investment solutions, will become head of Citi’s workplace wealth business. And Keith Glenfield, who’s been at Merrill Lynch nearly 30 years, will join Citi to take over as head of investment solutions, Sieg wrote in a memo to employees. The changes take effect in September.

Sieg, who was president of Merrill Lynch Wealth Management before joining Citi last September, noted he worked closely with Glenfield for close to 15 years as they built Merrill’s core investments platform. “This is the caliber of leadership we want to make sure we have all around the table,” Sieg said of both appointments during the conference. 

Last week, Citi snagged Morgan Stanley veteran Dawn Nordberg to lead integrated client engagement. Recent hires are enabling Citi to build a bridge between its wealth segment and its banking business, Sieg said. “This business can’t operate as an amalgam of subscale businesses,” he said. “We need to play like a very unified, scaled, global operator in wealth management.” 

Citi CEO Jane Fraser has noted the importance of growing the bank’s wealth segment to improve its business mix by adding more fee-based revenue. Citi seeks to double down on the wealth business to make up for exits from retail banking in India, China, Russia and Mexico, but the bank faces intense competition in the wealth management space both in the U.S. and globally. 

As the lender tries to bolster awareness that it’s an investment-side player as much as it is in deposits and lending, the wealth unit has zeroed in on asset gathering as the unit’s “north star,” Sieg said.

“The litmus test around a wealth franchise is, are you generating net flows?” he said. “We very quickly set net new investment assets as the guiding star of what our leadership team is focused on.”

Business leaders have also been “very open to putting the brutal facts of the financial performance of this business right on the table,” he said. The business has shrunk as the broader market has grown, and revenue has declined as expenses have risen, he said. 

“We’re taking that on, head-on,” he said. As Citi shaves expenses in the near term, Sieg said revenue growth should accelerate by 2026, expanding the business’s pre-tax profit margin.

To that end, the bank is revamping adviser incentive systems and productivity expectations to fuel new asset growth. Sieg said the business has reduced the size of its adviser footprint in the near term, “in an effort to ensure that those who are in front of clients are as productive as we expect them to be.” Citi wrapped up the “major actions” of its reorganization in March, cutting about 7,000 jobs. 

Many of the lender’s businesses have “some standout performers on the frontline,” he said, “but we’ve got others who just haven’t really been operating at the level that we need the business to.” 

The leadership team is closely involved in the wealth business’s daily operations, and leaders are enhancing coaching and training to bolster productivity and improve the client experience. “In areas of our business where we may only have ⅓ of advisers moving at the pace that we think is reasonable to expect in terms of growth, if we can bring that number up to ⅔ from ⅓, that productivity is the equivalent of doubling the size of your adviser force,” Sieg said.

Of Citi’s $1 trillion in total balances, investments account for $525 billion, Sieg said. But the bank’s current clients have $5 trillion invested elsewhere, underscoring that Citi needs to deepen its current relationships, Sieg said. 

“How do we ensure that a client where we’ve had a lending relationship for many years begins to see us as an institution that could help them around investments?” he said. “We’re very focused on that $5 trillion our clients have away from us.” 

Sieg also noted Citi’s franchise in Asia is the strongest and fastest growing part of its wealth business, and said the business aims to play to that strength.

In a Wednesday note to clients, Piper Sandler analyst Scott Siefers called Sieg’s comments “an important update given that Wealth has been an underperformer, and Mr. Sieg is in the early innings of a turnaround.”