Citibank is changing the way it does business—at least where its financial advisers are concerned. The advisers are no longer getting paid from commissions. Their compensation is now tied to a percentage of assets under management, i.e. if you have $5,000 at Citibank they charge you a percentage, in this case it's 1% ($50), to manage it.
Why It Matters to You
This is actually a pretty big deal. In the past, advisers at big banks have steered clients towards products (such as one of the bank's CDs or life insurance policies), for which they were getting a commission. Never mind that the client may have just walked in to get help with, say, how best to allocate their paycheck (x% to your 401(k), y% to a savings account, z% to stocks, etc.). Additionally, Citi is now giving clients the option of using local registered independent investment advisers. These smaller practitioners will likely pay more attention to the client who isn't rolling in dough. (Um, most of us.) Upshot: After years of ignoring anyone who wasn't a zillionaire, Wall Street is starting to cater to Main Street.