Citigroup’s Niche for Millionaires (NYSE:C)

Citigroup Inc. (NYSE:C) has opened a niche to millionaires.  Maybe this will attract some big money to Citigroup and help them on their road to recovery.

Citigroup Inc., 18 percent owned by the U.S. government, is testing a website to let millionaires’ children manage their allowances, while alerting parents and bankers when scions blow through cash too quickly.

Heirs to Citigroup’s wealthiest clients can log in to parent-funded accounts for discretionary spending, investments and “one-click giving” to charities. The site was developed by Tile Financial LLC, founded by former New York Stock Exchange finance chief and Bear Stearns Cos. analyst Amy Butte.

Banks are trying to nurture relationships with clients’ children to ensure fortunes aren’t transferred to other financial advisers as wealth shifts to the next generation, Butte said in an interview. New York-based Citigroup made a minority equity investment in Tile last week, said Chris Kay, head of the bank’s Growth Ventures and Innovation unit. He declined to disclose the size or price.

“Inter-generational wealth transfer is a very big issue for the industry,” Butte said, adding that $1 trillion will be inherited in the U.S. through 2025. “Even if we’re half-wrong, it’s still hundreds of billions of dollars.”

The Tile portal, called Spend Grow Give, is available to clients of Citigroup’s private bank, which caters to people with more than $25 million, including a third of the world’s billionaires.

Young heirs can get spending accounts linked to debit cards, and they can craft investment portfolios in consultation with a parent’s private banker. Tile also offers one-click giving to pre-approved charities, including Rainforest Action Network and the Global Fund for Children.

Source and read more at Bloomberg