Citigroup highlights importance of due-diligence

While some distributors are still considering whether to embrace OA, for others this has proved to be the only route ahead to remain competitive in an environment where investors are becoming more and more demanding.

According to Gavin Rankin, European product manager at Citigroup Private Bank, OA is “a mentality”. “It is how we approach the client solution,” he said. “We view open architecture not just as us offering external products but as us bringing advice to the table.”

Mr Rankin mentioned the fiduciary duty to provide clients with the best products as one of the main drivers behind a successful OA strategy.

“This is a fundamental part of our investment philosophy. We believe that client relationships are our best assets and we want to create and maintain long relationships.

“This can only be achieved by being a trusted adviser and providing products that we believe offer the best risk/return profile.”

Mr Rankin explained that one of the motors behind the development of the sector is the unique needs of the ultra-high net worth sector that want to have access to products beyond their bank’s own internal range. This highly sophisticated segment does not only require more exotic or sophisticated products, but it also demands the best advice. Distributors have to invest time and resources to be make sure that what the products are offering are the best around.

“We see this as a combination of external products and due-diligence, because without due-diligence the value of open architecture is minimal.”