Deborah McWhinney, the head of Citigroup Inc's rapidly shrinking wealth management business, is leaving her post following a whirlwind two-year reign.
The executive, who once served as president of Charles Schwab Corp's division for independent investment advisers, is moving to a newly-created position as head of global digital merchant acquiring. She will work with corporate clients on payment processing, according to an internal memo from Paul Galant, Citigroup's chief executive of global enterprise payments.
The bank has not named a successor for McWhinney, signaling the diminishing importance of branch-based retail brokerage following the spinoff of Citi's Smith Barney brokerage business in June 2009 to a joint venture controlled by Morgan Stanley .
McWhinney joined the bank in March 2009 after the Smith Barney deal had been announced.
She rapidly devised a new plan for her group's approximately 550 brokers by telling them to switch from a commission-based model for sales of mutual funds, annuities and other products to a fee-based model, similar to that used by most advisers at the Schwab unit that she ran.
She also ruffled feathers with a compensation plan that rewarded brokers for working in teams and by announcing a plan to refer clients with sophisticated planning needs to outside independent advisers.
Brokers headed for the exits. The sales force within McWhinney's banking/wealth management unit was almost halved within a year of her arrival. Today, it has around 400 advisers, according to a Citi spokesman.
McWhinney's plan to refer clients to outside advisers is now on hold, he said.
A change like this puts the whole strategy at risk, said Alois Pirker, research director at Boston-based consultant Aite Group. Given that they haven't announced a successor, I think there is potential they will wind down the business.
A Citigroup spokesman said the company has reiterated internally its dedication to further building the wealth management business in order to provide clients with best-in-class investment products, services and advice.
(Reporting by Helen Kearney, Editing by Jed Horowitz)