CLIENTS at Citi Singapore can now opt to pay a one-time fee for wealth management services instead of different sales charges for investments.

According to Citi, the new service - offered to its Citigold Select customers for now - not only promotes a better alignment of client and adviser interests, but also reflects how the bank will engage its clients post-crisis.

Mr Salman Haider, managing director of wealth management at Citi, said banks had to change the way they do business in this 'era of re-regulation'.

With the new wrap portfolio, Citigold Select clients - those with between S$1 million and US$10 million (S$14.4 million) worth of assets under management - will no longer incur any upfront sales charge or commission for transactions. These include upfront commissions on mutual funds and embedded fees in structured products.

Clients will instead be billed an annualised fee each quarter, based on the daily average market value of assets, such as structured notes, bonds and unit trusts, in the wrap portfolio.

For the first $500,000 maintained in the wrap portfolio, a one-time fee of 1.5 per cent is charged, and this could go to as low as 0.75 per cent depending on the remaining value in the portfolio.

Citi is the first bank in Singapore to introduce a fee-based wealth management model, typically reserved for ultra-high net worth private bank clients.

FRANCIS CHAN

This article was first published in The Straits Times.