Salomon Smith Barney Reps Have New Competitor - Citibank
No-load CitiFunds also offered under the SSB name.
When Citibank launched a new group of no-load index funds in September, it created an unusual competitive situation with Salomon Smith Barney reps.
The 11 CitiFunds - designed to compete online with Charles Schwab and E superscript *Trade - are the same load funds that SSB reps offer.
But Steve Cone, head of global marketing for Citigroup Asset Management, says CitiFunds do not represent competition for full-service reps.
"Salomon Smith Barney brokers realize Citibank has Internet offerings, and they'd rather see that business go to Citibank than another online competitor like Schwab, Fidelity or E superscript *Trade," Cone says. "We're just trying to get a share of the online market that we don't have today."
Cone says if an SSB client insists on purchasing an index fund in the Smith Barney channel without a load, they can.
One SSB broker in Florida has no problem with CitiFunds. "I get paid for advice," he says. "If a client is smart enough and can go online to get the fund for free, that's great. If someone comes to me, and the index fund is the one I put them in, they're paying for my advice."
The 11 index funds, launched Sept. 5, are:
- Citi Nasdaq-100 Index Shares,
- Citi S&P 500 Index Shares,
- Citi Small Cap Index Shares,
- Citi U.S. 1000 Index Shares,
- Citi U.S. 5000 Index Shares,
- Citi Global Titans Index Shares,
- Citi International Index Shares,
- Citi Financial Services Index Shares,
- Citi Health Sciences Index Shares,
- Citi Technology Index Shares and
- Citi U.S. Bond Index Shares.
The same funds are available via SSB under the Smith Barney name.
"With CitiFunds, we're actually going after Citibank customers," Cone says. "They're a different audience [than SSB clients]. They tend to be not as affluent, younger and more in tune to trade online."
