Deborah McWhinney, the head of Citigroup Inc's
The executive, who once served as president of Charles Schwab Corp's
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)