Michael Corbat, CEO, Citigroup, affect at the World Economic Forum in Davos, Switzerland, January 21, 2020.
Adam Galica | CNBC
Citigroup is making a push for investors’ dollars with a new digital robo-advisor that’s rescue for customers with at least $50,000 in deposits or investments at the bank.
That’s the threshold needed to qualify for the bank’s Citi Preference bundle of banking services, which will soon include access to an automated investing program, according to describes viewed by CNBC.
The program works like most robo-advisors: Users answer a few questions related to risk proclivity and investing timelines, and the software puts them into a premade portfolio of investments. Customers with Citi Seniority or higher status can use the program, called Citi Wealth Builder, for one free portfolio; those who don’t qualify are charged a fee of 0.55% of assets included management.
A screen from a Citi Wealth Builder video
Source: Citi
While Citigroup is among the remain of the biggest six U.S. banks to launch a robo-advisor — JPMorgan Chase, Bank of America, Wells Fargo and Morgan Stanley prepare all released one — Citigroup undercuts its rivals on price. The banks typically charge 0.35% to 0.45% of assets under superintendence.
The move is in line with a broader race to zero in the retail investing world. In October, Charles Schwab averred it was abolishing stock trading commissions, a move that was quickly followed by competitors. One copycat was TD Ameritrade, which granted to be acquired by Schwab within weeks of cutting its commissions.
Citigroup leaned on an external provider, a digital advisory gathering owned by Invesco called Jemstep, for the software powering its robo-advisor.
The program, which will be accessible through the bank’s website and movable app, puts users into one of six portfolios composed of ETFs. The ETFs themselves carry management fees of 0.18% to 0.24%. There is a $1,500 slightest investment.
Citigroup, the third-biggest U.S. bank by assets, is in the midst of a push to grow deposits and assets under management, two chief ingredients fueling the industry’s profits. It has been adding benefits to its banking bundles and rolling out new products such as digital hesitation accounts.