Citizen Financial Group, One of America’s largest bankshas traditionally not been shortlisted when top advisors consider relocation.
But the Providence, Rhode Island-based bank is building a fast-growing wealth management business to fill the void the industry has fallen behind, especially in early-career advisors and talent development. Things could change in the next few years. So do veterans.
Philip Waxelbaum, industry recruiter at Beverly Hills-based Masada Consulting, said of Citizens’ position in the wealth management industry, “They’re not big enough to attract anyone’s attention. resources,” he said in an interview. .
with Recently hired around 50 private bankers and support staff FROM THE OLD FIRST REPUBLIC — It is now owned by JPMorgan Chase. — Citizens show plans to get more attention. the bank is About $222 billion in assets and $172 billion in deposits As of the end of March, Became a bidder for the First Republic in the aftermath of spring banking crisis.
Despite losing the bid, this new recruiting coup effectively gave the bank a slice of the First Republic pie. It has also expanded its citizen footprint in several key coastal markets to serve high net worth individuals such as bankers. I’m from Boston, Florida, New York and San Franciscoaccording to a press release.
“This shows the industry that Citizens is doing something special and that Citizens is a great place to be,” Chris Weyrauf, Citizens’ head of wealth management, said in an interview about the news. .
Weyrauf said the First Republic bankers were not actively recruited by the people. “They came to us,” he said, adding, “We were obviously competing with a lot of financial services when they started shopping and looking for new homes.” .
The new addition was First Republic’s private bank, which has been a major source of client referrals to the wealth management business, Weyrauf said.
A similar corporate culture at a local bank was attractive to the group.
“We are a large company, we have a strong balance sheet, but at the same time we are not too big to care about our clients and provide the high-touch client service model they are accustomed to,” Wairauf said. said Mr.
read more: Citizens Hire 50 Former First Republic Private Bankers
Bulk up the entire segment
The bank’s further foray into wealth management began when it was announced about five years ago. Plans to acquire New York-based Krawfeld Financial Advisors in 2018ultra-rich practices – trading closed in 2019. Krafeld, a boutique “white glove” shop, offers everything from family offices to investment management to tax planning and bill payment services, Weirauf said.
In 2021, citizens hired Mr Wairauf He succeeded Ryan Parker as a TIAA veteran for nearly 30 years and contributed to building the wealth business.In the same year he said that Announces plans to acquire Investors Bancorp and San Francisco-based JMP Groupan investment bank.
In 2022, Acquired 80 East Coast branches of HSBCCompletes Acquisition of Private Investment Banking Company DH Capital and Purchased assets of Paladin Advisors, a registered investment manager based in Kensington, New Hampshire.
In the fall of 2022, Citizens announce plan to establish new private bank, Citizens Private Client by the end of the year. The program is open to clients with deposits or investments of $200,000 or more and offers clients not only financial advisors, but also “dedicated relationship managers” and certified financial planners as part of their service. there is team service for clients, according to a press release at the time. The bank said it aims to hire about 200 financial advisors and relationship managers for individual clients.
“We are on pace to have 125 individual customer relationship managers on site by the end of August,” Weirauf said.
Citizens also introduced a proposal called At the same time, Citizen Plusincentivizing eligible clients to start working with wealth managers, offering cash rewards and loan discounts.
read more: In the aftermath of a public takeover over a Florida asset manager
“No, we don’t have a strong brand,” said Weyrauf, adding that the bank is looking at ways to invest in better marketing of its wealth business. Wealth business is expected to double in the next few years.
But he believes the company has the potential to challenge not only the region’s companies, but also the industry’s biggest players.
“That’s Morgan Stanley, Merrill, and the Ameriprise of the world,” he said.
What ingredients are missing?
The secret sauce may be where some of these heavyweights and industry peers are said to be missing: talent development. Nearly three-quarters of financial advisors with less than three years of service have left the business, according to the company. Survey results released by Seruri Associates in June.
Weyrauf said he was not surprised by the grim data given the ups and downs nature of many industry training programs he has known.
“Some of these companies onboard new people, train them, and then tell them to answer the phone,” he said. “That makes it really hard to be successful.”
In a Cerulli report, 69% of surveyed “newbie” advisors said they had to create the entire client book themselves.
read more: Advisors with $2.4 trillion in assets are retiring as young talent flees the industry
At Citizen, new trainees undergo a three-month onboarding, during which the focus is on customer service rather than sales.
“This is very focused on leading towards the financial planning experience,” said Weyrauf.
Trainees continue to receive support from their coaches for years after they graduate from the recruiting program. You will also have a mentor who has taken the program before. In addition, Weirauf said advisors use a “centralized hub of expertise” of about 30 certified financial planners. In addition to creating plans for clients, experts on the “planning team” help advisers prepare for meetings with clients, he said, and sometimes even accompany them.
“With these training classes, FA turnover is much lower and they are having much greater success early in their careers,” said Weyrauf, adding that despite challenging market conditions in 2022, Citizen “ We have increased our fee income and revenue in 2022,” he added. in a meaningful way. ”
Weyrauf said the focus on financial planning has also proven to be popular with customers.
“This year we will probably provide more than 25,000 financial plans,” he said.
Weyrauf said investing in young talent should lead to increased loyalty and ease of hiring.
“It’s pretty unlikely you’ll get a call (from someone else),” he said of Citizens’ younger advisors. A program that could put them among the 18,000 employees working across the bank, thanks to the newly introduced in-house mobility.
“We have just welcomed our 11th class of recruits since I joined the company two years ago, and about 30 have just graduated from our recruiting program,” said Wairauf, adding, “From a headcount perspective. From the point of view of the company, there is a net positive profit”, and some new employees have joined the new trainees through word-of-mouth referrals, which has been well received.
waiting in the wings
Finally, Weyrauf said many advisors have room for careers at Citizens. From its virtual financial advice channel, the company serves not only the mass affluent but also the “perhaps fastest growing” channel, the affluent, as well as the affluent and ultra affluent.
read more: Godfather, Tiger Feeding, A La Carte: How RIAs Win Ultra High Net Worth Customers
“There is a huge opportunity with the prevalence of high net worth customer service models,” said Waxelbaum, noting that former players in the space, such as Lehman Brothers, Credit Suisse and Bear Stearns, have existed due to acquisitions and subsequent customer declines. He pointed out that the feeling had faded. The ranking rose sharply after the financial crisis of 2008. That, combined with the “explosive growth of the ultra-rich” in recent years, is giving way to new entrants like Citizens.
“But it’s so competitive that it’s really hard to tell who’s going to be successful,” Waxelbaum said, adding that in the case of Citizens, Hiring in the First Republic may still be seen as an isolated event. rice field. “They don’t have the critical mass for anyone to start the game.”
Jason Diamond, vice president and senior consultant at Diamond Consultants, an industry recruiter, agreed in conversations with advisers planning a move that he hadn’t heard much about Citizen. “This is not to say that Citizen will not succeed in the future.” ”
“They need to get a few meaningful wirehouse-type teams, and that really provides a proof of concept,” Diamond said. “If you can prove you’re a legitimate choice for sophisticated corner-office type teams, it will be much easier to convince new hires in the future.”