Citigroup Inc. To Introduce No-Fee Stock Trading
Top investment banking company Citigroup Inc. shall allow clients to bet against stocks without any fee. This is in an attempt to increase the bank’s wealth business in order to compete with discount brokers, Silicon Valley companies, and major banks.
Citigroup is introducing this service under the name Citi Self Invest offering value customers the ability to make no-cost self-directed investments. According to the head of US consumer wealth management, David Poole the initial offering is going to be made to account holders first. It is only after this that it will be marketed to more people. He further added that the zero-fee or no-free deal is applicable to individual stocks and ETFs like mutual funds and options. Additionally, there will be no-account minimums attached to the newly-released service.
CEO Jane Fraser who assumed office this year is restructuring the bank’s business attending a range of clients, from aspiring investors to the wealthy. In January this year, the company merged its wealth management division and a private bank into a new division called Citi Global Wealth. The new division is headed by Jim O’Donnell. The latest offering does not require a minimum account size and is supporting operations that serve cost-conscious investors. Such investors have increased incessantly in number during the pandemic. This is a step towards making the process easier and more convenient.
Poole stated that the self-invest service will help the bank expand and grow. He added that Citi Self Invest is another important stage in providing a safe and intuitive full investment continuum.
This move may put pressure on companies like Robinhood Markets, which is a very popular trading application. Last year the app gained a lot of popularity as it became the customer’s venue of preference for shopping. Robinhood is planning a public listing of its own while also reporting record volumes of newcomers on its platform. Similarly, TD Ameritrade discount broker and Charles Schwab also reported a record level of inflow of new customers on their trading platforms.
In terms of no-fee options, independent investment platforms such as JPMorgan Chase & Co. and Bank of America Corporation are ahead of Citigroup. However, Citigroup’s business and setup are already formidable. Companies that are now classified as Citi Global Wealth would generate a total of approximately $6.6 billion collectively. This was revealed by Citigroup back in April where it also mentioned part of which will come from private customers.
Other products that Citi has introduced include Citi Wealth Builder, Citi Wealth Advisor, and Citigold Private Client. It also brought forward a nationwide program Citigold Subscription Rebate which offers annual rebates worth $200 to clients. This is for use
To help new customers and amateur investors, the bank is also launching a training center with Self Invest.