inancial portfolios are not always what they seem. For many investors, the traditional approach to diversification has meant spreading their investments across a range of asset classes, but this strategy can still result in a portfolio that is too focused on particular industries, regions or sectors.
For example, a recent multimillionaire survey conducted by Citibank found that high-net-worth individuals in Hong Kong with investable assets of more than HK$10 million had, on average, 3.7 different investment products (such as stocks, mutual funds and bonds), which they mistakenly believed provided sufficient diversification to protect their portfolio from concentration risk.
This is where Citigold Private Client can add value. Part of Citibank’s suite of wealth management offerings, it caters for people with liquid assets of between US$1M and US$10M, fitting in between Citigold, for those with US$200,000 to US$1M to invest, and Citi Private Bank, aimed at those with more than US$10M.
“Citigold Private Client provides a full range of wealth management expertise to help clients balance their portfolios,” says Lawrence Lam, head of retail banking at Citibank.
Two services introduced last year, Portfolio 360 and the Equity Recommendation Service, aim to provide clients with the sort of diversification they need to face the future confidently during an era of market volatility.
As an example: A director of a real estate development company is a Citigold Private Client customer and an experienced investor who has always understood the need to diversify his portfolio, and had been doing so by investing in funds managed by a variety of different institutions. When a portfolio counsellor from Citigold Private Client’s Portfolio 360 service took a look at his investments, however, a potential weakness was uncovered: although he used a variety of funds, they mostly invested heavily in Asia. This was a concern because Asian stock markets tend to experience falling valuations at the same time as local housing markets, so he was exposed in the event of a downturn in the real estate sector. Citigold Private Client’s consultant was then able to help him reshape his portfolio to mitigate this element of risk.
As the name suggests, Portfolio 360 consultants take a holistic look at a client’s finances. This goes well beyond traditional advisory services, taking into account every aspect of a client’s portfolio to provide a comprehensive assessment of the potential risks and opportunities they face, and then advise them on how they could allocate their assets more effectively to achieve their personal financial goals. The service draws on the expertise of its portfolio counsellors, all of whom are investment professionals with more than 10 years of experience, many of them as fund managers, and who are ideally placed to advise clients how best to balance their investments.
Since last year Citigold Private Client customers can also take advantage of an offering previously only available to Citi Private Bank customers: the Equity Recommendation Service. Citibank’s research team is one of the bank’s strongest advantages over its competitors, and the full force of that team’s insight is brought to bear through the Equity Recommendation Service, which tracks thousands of individual stocks and provides clients with targeted recommendations. Again, the bank’s senior investment specialists will assess a client’s full portfolio and then provide them with advice on both their general investment approach and the specific stocks and sectors with the potential, based on insights into several thousand stocks traded in Hong Kong, Shanghai and the US.
Although impartial advice from an experienced source is always the most valuable aspect of any wealth management offering, the tools with which those insights are communicated to clients and the range of information available are changing rapidly. This is something Citibank has always embraced; the bank believes that new technology can complement and enhance the value of the services it has traditionally offered.
It is certainly true that clients today have access to a huge range of information thanks to the internet, but high-net-worth investors have always had access to good information. The real difference is in expectations: clients today expect to be able to keep in touch with the progress of their investments in real time.
“That’s why Citibank puts the customer at the centre of all the technologies we develop, providing our expertise through a variety of channels and making it as easy to access as possible,” says Lam.
The bank even has its own broadcast centre. The aim is to provide clients with relevant and timely market information that relates to their portfolios—and how the bank is working to make them stronger.