Personal touch keeps Citi playing in ‘Premier League’

Luigi Pigorini, the 56-year-old football playing CEO of the Citi Private Bank franchise for Europe, the Middle East and Africa is in an upbeat mood, as he eats a typically frugal breakfast of mixed fruits, washed down by espresso coffee at the bank’s main London client-servicing centre, in a quiet backstreet close to Trafalgar Square.

Citi, says the lean and fit Italian banker, tends to perform when markets are not performing spectacularly but there are no crises in sight. He is convinced the business model, aimed to attract assets only from the “upper echelons” of the high net worth world, is already a tried and tested one, generating increased revenue growth as more private clients, especially financial professionals, sign up with the bank.

The big five

Most of these types of clients need at least one bank from what Mr Pigorini, in typical football parlance, calls the “Premier League” of wealth managers. 

In this exclusive selection, he names his own bank, in addition to fellow US travellers JP Morgan and Goldman Sachs and the duo of Swiss giants, UBS and Credit Suisse. “Then below the Big Five, there is everyone else,” he adds.

The leading players, he says, must be able to respond to requests to deliver, particular high-quality solutions. “When you look at football, Manchester City, Liverpool, Chelsea and Arsenal have better quality players than Crystal Palace, Bolton Wanderers and Queen’s Park Rangers,” he says, comparing the top banks to the elite teams and the second-string of perennial strugglers. “We have a high-quality team with a culture where everyone wins.”

All the top banks, he believes, are competing for a tightly-defined market of just several thousand global families in the “ultra” wealthy segment, targeting the top 300 in any one country. After an initial call or increasingly a digital enquiry from the big families, the hard work starts and a relationship manager will be assigned to evaluate whether taking on the client will be beneficial for both bank and customer, in terms of returns, revenue, and compliance purposes.

At Citi, a relationship manager will handle 30 families at most, so the balance between technology and personal service must be an optimal one. “This is a fundamentally different model to the type of bank which serves 300 clients per adviser,” ventures Mr Pigorini. “You can afford to pay a lot more attention to them, and the system works. You help the client understand that by signing up with us, they are getting good value, they are getting personalised attention.”

Although banks spend millions differentiating brands and service propositions to clients, Mr Pigorini maintains the top clique provides broadly similar product offers, with a specialist investment bank able to supply capital market ideas and merger and acquisition capacity.

“The way the likes of UBS and Credit Suisse work is quite similar to our approach,” he confides, proud of the fact that the one-bank model of a financial services organisation able to furnish both corporate and private clients with all their investment needs originated not in the refined lakeside city of Zurich, but in the brasher numbered streets of Manhattan.

 “Our ties with the markets and investment banking divisions – involving the manufacturing and execution of investment ideas – and their relationship to the private bank works very well and is one of our critical success factors,” he says.

One type of client

How the Citi brand differs is that it is “dedicated to just one type of customer”, says Mr Pigorini, referring to “globally mobile families of a certain wealth”, with most enjoying financial interests in the US and Asia, in addition to London and possibly Switzerland and the Channel Islands, all regions in which Citi has an active presence. He also oversees Citi’s private banking operations in key centres including Dubai, Madrid and Frankfurt.

“Some of our private banking relationships function just like working with companies, as family offices may employ between 10 and 40 people,” he says. “If we are dealing with a 30-person family office, then the team on our side needs to be big too as they have a professional set-up and are looking for super service and a multiplicity of contacts.”

The offer for such demanding clients would typically include mortgage lending, credit specialisms and capital markets expertise, to help manage the finances of several generations, including grandchildren of family founders, studying in several different jurisdictions.

The objective, says a reflective, relaxed yet highly bottom-line focused Mr Pigorini, is to ensure “the relationship is so ingrained that if you perform well, it is very difficult for a competitor to dislodge you from your leading position”.

“If you are one of two leading banks for a family – most of them are multi-banked and we want to be one of these two leaders – their requirements are usually so complex that you require a global team, speaking the same language and delivering the entire bank. It sounds easy, but it’s very difficult to achieve in practice.”

Although Mr Pigorini cannot reveal how many clients his bank has due to commercial reasons, it is clear he has got to know most of them and speaks to them regularly on his travels.

“When an opportunity or deal comes in, I will typically know the family and they know me,” says the personable banker. “That means if something goes wrong, they can just pick up the phone and call me.”

Not surprisingly, he gets a steady stream of calls from recruitment consultants claiming they have many candidates who can provide this sort of personalised service to a small number of wealthy clients. 

“I tell them that if you really have somebody who wants to work for Citi Private Bank, they need to understand the model, its value and bring relationships to us from their own country.”

But Mr Pigorini stresses that just because a banker from a rival institution has a big book of clients in Italy, the Middle East or the Nordic region and wants to defect to Citi, this is not enough reason to take them on. The fit with the Citi brand is crucial.

Behind the brand

“A handful of private banks spend millions on promoting a brand through billboards in airports, high-quality production TV adverts and sponsorship of high-profile sporting events,” says Amin Rajan, CEO of the Create-Research Consultancy. 

“But there is much more to a brand than the money and creativity behind it. The ultimate test is the delivery of the promise. This is where Citi has the advantage.”

It is this buy-in into the bank’s vision which Mr Pigorini sees as more crucial than bringing in a few pockets of business, even though contacts are important. “What is important to me is that both the product specialists and relationship managers all think in the same way, which fits the Citi model,” adds Mr Pigorini.  

Real assets replace black boxes

Like many private banks, Citi is increasingly promoting alternative investments including private equity and real estate to its clients, though hedge funds have a much lower billing today than at the turn of the millennium.

“During the financial crisis, hedge funds were promoted as a cushion against volatility, but clients realised they did not behave very differently from traditional asset classes, so they lost a lot of value,” says Mr Pigorini. “Clients today are much more focused on strategies they understand.”

This means a definite shift away from the black box hedge type products, which were managed out of New York by Citi in its heyday of the late 1990s and at the turn of the millennium. While hedge fund selection, in an almost industrial fashion, was once a pride of the bank, it has now been seriously downgraded, as clients deserted the asset class.

Today, private equity and real estate have taken pole position.

“Post-Brexit referendum, we saw a big influx into UK companies, sterling and mainly UK residential real estate,” says Mr Pigorini smiling, with the sweet memory that he co-ordinated a mass callout from his relationship managers immediately after the result, contacting every wealthy family and recommending they act appropriately to profit from the volatile situation.

“We saw huge tactical plays in June last year around the date of the referendum. Our clients were very happy in terms of returns.”