Citi Global Wealth APAC Co-head Fabio Fontainha outlines bank's ambitions
Fontainha expounds on Citi's wealth goals, which include adding $150b AUM across the APAC franchise in four years’ time.
In January, Citi announced the formation of Citi Global Wealth (CGW), combining its Private Bank and Consumer wealth business under one banner, under the leadership of its former global head of investor sales and relationship management, Jim O’Donnell. In Asia, the mantle of head was given to the former retail head, Fabio Fontainha, and private bank head, Steven Lo.
With approximately US$300b in assets under management (AUM), Citi is already amongst the top three wealth managers in APAC — and Fontainha and Lo have been tasked with further driving Citi to maintain and even surpass its position as one of the top wealth managers in Asia (excluding Japan), which boasts of a $42t wealth market.
"Asia is an important source of growth to our firm. It is a source of enhanced returns for Citi; and an area where we see innovation happening at speed. We also believe that our global wealth strategy will benefit from a stronger position in Asia," Fabio Fontainha, co-head of Citi Global Wealth in Asia Pacific, told the Asian Banking & Finance in an exclusive interview. "We can invest here and take successful ideas to other parts of the firm to drive change and to support the transformation of our bank."
Goals include adding over US$150b AUM across the APAC franchise by 2025. Hiring plans are also underway with hundreds of new professionals joining Citi APAC as part of its target to add 2,300 professionals in the bank, 1,100 of which are relationship managers and private bankers.
In his first major interview since taking on the co-head role, Fontainha shares his vision for the bank's wealth business in Asia.
What are the aspirations of Citi Global Wealth in Asia?
"A favourable industry backdrop has set the stage for Citi’s doubling down on wealth management. Global wealth is growing at a rapid pace at over 5% over the past two decades, with Asia growing the fastest at 11% over the same period, driven by China.
"The opportunity is available across all segments, from affluent to ultra-high net worth. Given our presence across the wealth continuum, this plays to our strengths in the region where we have a unique platform.
"We are privileged to have served our wealth management clients in Asia for decades. Our vision now is to further leverage Citi’s aspirational brand and CGW’s strategy is focused on delivering the firm’s global network, high-quality advisory and content, combining it with leading capital markets and product expertise.
"This new business integrates the Citi Private Bank and the Consumer Wealth organization, including the International Personal Bank, into a single platform that will serve clients from the affluent level all the way through to ultra-high net worth individuals and Family Offices.
"Importantly, we are also coming at this wealth opportunity from a position of strength in the region — Citi is already a top three-wealth manager in Asia with over US$300b in client AUMs.
"We have Wealth Management Hubs in Singapore and Hong Kong that will serve as important centres to grow further the wealth business across the region. The CGW hub strategy will be complemented by our leading digital capabilities. This is important as we think of our clients as individuals who have the ambition to access the best products and solutions and are increasingly agnostic to where that is delivered from.
"Citi is also the most global bank in the world — our bank has on the ground operations in close to 100 countries. This matters more than ever as this global perspective is increasingly a competitive advantage as we discuss wealth opportunities across the world with our clients. The wealth conversation with Asian clients is increasingly global.
"We also have leading institutional businesses in the region — from FX, to hedging, to capital markets, and M&A opportunities. By bringing together the best of our institutional and retail capabilities under CGW, we are uniquely positioned to build a leading integrated Wealth Management business that will serve clients seamlessly along the wealth continuum. Through technology and a deliberate talent strategy, we aspire to introduce these solutions to our clients as they increase their wealth over time."
How important is Asia in supporting Citi’s global wealth ambitions?
"We see a tremendous opportunity in Asia, specifically in China and across the broader region. Wealth in Asia, in the last 20 years, rose from $5.1t to $42t, excluding Japan. But other changes are happening at the same time as all this personal wealth is created. We will observe, over the next several years, changes coming from decumulation needs, mass customization algorithms, client-banker remote interaction technologies, portfolio customization, and more.
"We all know that global wealth assets will continue to grow; emerging economies will grow faster than developed markets in the long-term; and that High Net Worth and Ultra High Net Worth segments will continue to expand dramatically around the region — and we want to purposely be a part of that journey. We can grow with our clients; be able to provide them with all of the banking and wealth products and services they need along the way.
"In this region, personal wealth continues to grow rapidly, the demographic dynamics remain favourable, including increasing levels of entrepreneurship. These factors, combined with several others are leading to an increased demand for wealth management services, which we expect to capture with our differentiated global offer.
What can Citi do differently in wealth, versus peers, given it is a crowded market?
"We are putting the full force of the firm behind this effort. It is all about integrating our platforms and resolve for the gaps we see. We want to create a single, integrated wealth platform that will serve all wealth management clients, providing tailored capabilities for affluent individuals to ultra-high net worth families.
"We have several components that differentiate us from our competitors, and these components put together with purpose can produce a differentiated offer that we expect to resonate with our client segments. Our global footprint, extensive banking and lending services, world-class capital markets expertise, digital capabilities, research and content capabilities, open architecture, talent base, and aspirational brand are a few of these components. We can offer it all under one distinctive value proposition.
"We have been very deliberate in combining our capabilities, making sure they make sense for each segment so every client can have access to the best available, in a relevant, meaningful way that supports their needs and distinguishes us from competitors."
Could you expound about Citi’s hiring plans and targets for CGW?
"By 2025, we are looking to add 2,300 professionals, including 1,100 relationship managers and private bankers, and invest in innovative technology to support growth – much of these will be across Hong Kong and Singapore. We have hired several hundred already in 2021 and new talent is increasingly attracted to our value proposition alongside our ambition.
"We are also looking to add in excess of US$150b AUM across the Asia Pacific franchise by 2025 and further extend our leadership position in the region.
"We have very specific objectives that ultimately will produce great solutions to help our clients grow and achieve their financial objectives. We are building a plan with tangible milestones across technology, digitization, simplification, and robust controls.