Citibank Brokerage Account Review: IRA, Trading Fees, Investment Cost, Wealth Management



Introduction


Besides banking services, Citigroup also has a brokerage department for securities traders. In addition to the usual range of stocks, bonds, and mutual funds, the company also offers investment advisory services, and products for education and retirement savers. Let's take a look at Citi's investment lineup and see how it compares to other brokers.


Investment Services at Citi


Brokerage accounts are available with Citi Personal Wealth Management for both do-it-yourselfers and people who would prefer to leave the trading decisions to the pros. Retirement accounts can also be opened. The firm offers Traditional, Roth, and Rollover IRA's.

A range of securities can be traded in these accounts, including ETF's, stocks, options, bonds, and mutual funds. Citi also offers annuities, estate planning, insurance, trusts, and education savings plans. Margin can be used in a regular brokerage account.





Citibank Trading Fees


A self directed account pays $19.95 for stock and ETF transactions. Accounts that have at least $500,000 in assets are charged only $9.95. Option contracts cost an additional 50¢ plus 0.28% of the order total. Penny stocks cost $39.95 plus a per share charge if the order is above 100 shares. The fee is 20¢ per share for shares between 101 and 500. A 4¢ charge is assessed for each share above 500.

A self directed account has an annual fee of $75 and a minimum balance requirement of $25,000. Not meeting the minimum balance requirement produces an additional $100 fee, which can be waived by placing at least 4 trades per year. There is no minimum deposit required to open an account.

A live representative can help clients to place a trade over the phone. This service does cost extra, however. In fact, it increases a stock or ETF commission by $20. In addition to the $39.95 base, options cost an extra 20¢ per contract and an extra 0.07%.

Managed accounts pay no commissions. Instead, they are charged an annual fee that is billed as a percentage of assets under management. Different plans are available. One plan that is managed by a committee of Citi investment advisors costs 1.25% annually. There is a $25,000 minimum account balance. ETF's and mutual funds are available, although $1,000,000 is required to add stocks to the portfolio. Option contracts cannot be traded in a managed account.


CitiGold


Citi offers a package for high net worth individuals called CitiGold. Assets of at least $200,000 are required to participate. Bank balances can be included in the calculation. There are many perks with CitiGold. For example, the annual brokerage account fee is waived. Other amenities include travel services, reimbursement of foreign exchange fees, access to Citi investment research, cash for certain emergencies, and a CitiGold relationship manager and financial advisor. CitiGold members also qualify for ATM refunds when using non-Citi machines and special rates on Citi deposit products.





Banking Features


Citi has a wealth of deposit features that brokerage customers can take advantage of. For instance, there are several checking accounts available, some of which have free checks and no service charges when selected activities are completed. A CitiGold checking account is also available. All accounts receive free ATM withdrawals at Citibank cash machines. Savings and money market accounts are also available. Bank accounts can be linked to a securities account, and overdraft protection can be established between accounts.


Customer Service


A Citi investment specialist is available over the phone Monday through Friday from 8 am to 9 pm, EST. On Saturday and Sunday, representatives can be reached anytime between 9 am and 7 pm. Financial advisors are on the phone during the weekday from 9 am to 7 pm. A CitiGold account receives 24/7 customer service.





Comparison


Citi Personal Wealth Management's $19.95 commission for stock and ETF trades is hard to justify when compared against other brokers that offer self managed accounts. TD Ameritrade, for example, charges $9.99 for any account with any balance. Schwab is at $8.95, and Scottrade customers pay a flat $7. None of these brokers charge annual account fees, either.

The lack of 24/7 customer service for most clients is a disappointment. Fidelity, E*Trade, and Merrill Edge are just a few brokers to offer service around the clock. Unlike Citi, they don't require a $200,000 account balance to receive service at any time. They also don't have any minimum balance requirements.

Traders don't receive any ETF's commission-free at Citi. This is a significant failure, especially given the broker's high fees. By contrast, even the low-cost Firstrade offers 12 exchange-traded funds that are free to trade. Schwab has more than 200, Vanguard clients have access to 55, and TD Ameritrade offers over 100.


Summary


While Citigroup has brand recognition and can boast that it's one of the largest banks in the world, in the realm of brokerage services it underperforms. Investors with at least $500,000 to deposit can receive service and commissions that may make the company worth doing business with.


Updated on 12/3/2016.


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