Open architecture offers Citi Private Bank a competitive advantage over its peers and the private banking giant has no plans to move towards a preferred-partner model.
That is according to Luigi Pigorini, EMEA region head of Citi, who said the face the bank is not a manufacturer and distributer of strategies is emerging as a badge of honour among its high-end wealth investors.
‘We don’t sell our own products and we don’t manufacture our own funds,’ he said a panel session in London.
‘Even when we provide capital market solutions, the manufacturer of the capital market solutions goes out to the market to get the best price, it is not an internal decision. Clients actually love that.’
Jeremy Knowland, global market manager at the private bank, added that the firm will not be shifting towards preferred partners concept any time soon, as open architecture provides much more choice for clients.
‘Open architecture is fundamental to our clients' expectations. It is the essence of what all these large family offices are expecting these days as they want to come to a place where they believe they can get the best price and where we can provide access and advice about what they do and how they access it.’
Knowland added that the bank puts an emphasis on thematic research, where its 300 analysts identify around 80 different themes. Healthcare was singled out as the most recent new conviction.
Philip Watson, global head investment lab at Citi, said it is also important to know not only which theme is relevant but also when to buy and sell it.
‘We have an ongoing thematic process where the research team identifies managers that are the best across the whole universe on our open architecture platform and we work with them to help our clients invest.’
‘With the administration of Big Data we learn very rapidly the themes which are interesting but also those that may be expensive. Instead we can opt for something that is not quite there on the market, like desalination or deep-water drilling, for example.’
In line with its thematic focus Citi Private Bank has also partnered up with another company to launch an ESG-focused global growth index, which will be unveiled in the second quarter of 2018.
The index will allocate to companies based on their capital growth expectations rather than their market cap and will have an ESG overlay.