Andy Sieg left Merrill for a shot at being Citi’s next CEO. Now he has to fix a barely profitable wealth business.

The shock was due not so much to his departure but to the decision to leave for Citigroup’s wealth division, a business with less than a third of Merrill’s assets and profit margins well below its peers.

“It would be a terrifying position to be in, candidly,” a senior wealth-management executive said.

But industry insiders, including Sieg’s colleagues, told Business Insider that Sieg likely has his eyes on a bigger prize: becoming the chief executive of Citi, one of America’s “Big Four” banks. If he can turn the wealth unit around, he has a shot at a role that wasn’t open to him at Bank of America.

“My personal view was he was not going to be CEO of Bank of America,” said Kevin Crain, a retired Bank of America executive who worked with Sieg. Crain said that while Sieg isn’t guaranteed to succeed CEO Jane Fraser, “there is a different outlook of advancing at Citi.”

Fraser, for her part, hopes Sieg will be able to turn around a business that has struggled to scale into a steady profit driver for the bank since the financial crisis.

Sieg has his work cut out for him: rebuilding a business with three disparate divisions that sprawl the globe yet make up only 4% of Citi’s earnings. He has set ambitious targets such as boosting its pretax margin from 6% in 2023 to 30% in the next three to five years. Underpinning his strategy is a cultural shift: getting bankers to rely less on loans to the rich and sell as many investment products as possible. His changes have shaken up the leadership ranks, with five of his direct reports leaving, in addition to 17 other senior executives.

Sieg has been candid about Citi Wealth’s troubles.

“This is a business that’s been shrinking as the market has been growing, returns unacceptable, as revenue has been declining, expenses have been going up,” he said at a Morgan Stanley conference on Wednesday. “Investors are — and should be — very disappointed about the returns of the business.”

To understand Sieg’s drive, his new mission, and his odds of overhauling the wealth division, BI spoke with 13 current and former Citi employees, four ex-Merrill colleagues, several of Sieg’s peers, and analysts and recruiters. Most of his current and former colleagues spoke on the condition of anonymity because of their employment contracts or for fear of reprisal.

Citi and Sieg, 57, declined to comment on this story. But his unwavering confidence in his plan was on display for investors to hear on Wednesday.

“You can’t take the seat that I’m in without, in my view, setting a very high bar in terms of over time what success should look like,” he said. “I mean, this should be the No. 1 wealth-management business in the world over time.”

The unit’s struggles can be traced back to 2009, when it sold the crown-jewel brokerage Smith Barney to Morgan Stanley for pennies on the dollar. Morgan Stanley is now the envy of Wall Street, with $5.5 trillion in assets.

A recent internal audit seen by BI described core issues including the firm’s bloated ranks and outdated technology that frustrates customers and employees.

“It’s like a baseball team,” a current operations leader said. “He’s a good coach or manager, but he does not have a good starting lineup.”

Bank of America analyst Ebrahim Poonawala recently argued that Citi should consider selling the wealth business if it cannot improve its profitability. Even Citi’s biggest bull, Wells Fargo analyst Mike Mayo, is bearish about the unit’s prospects.

“It’s so intriguing as to how they think they can possibly win after a couple of decades of mishaps in such a highly competitive space,” he said. “What’s new now? What’s the secret sauce of Andy Sieg?”

Sieg revitalized Merrill when he took over as president in 2017. He revamped its compensation scheme to reward financial advisors who added net new households a year and penalize the ones who did not. This drew the fury of some advisors but juiced growth. Over his six-year tenure, client assets increased by nearly 50%, to $2.95 trillion.

“It was a bold move, and it was aggressive,” a former Merrill senior executive who reported to Sieg said. “He wasn’t afraid of the repercussions.”

He earned several million dollars a year, reportedly collecting $6.75 million before the pandemic. Former Merrill colleagues and industry insiders say he still wanted to advance and succeed Bank of America’s chief executive, Brian Moynihan.

But a former senior executive said the cards were stacked against him, partly because he hailed from Merrill, which Bank of America acquired during the financial crisis. The wealth manager and the banking behemoth made for an odd couple, and the culture clash can still be felt.

“The executive culture at Bank of America, it wasn’t a fit for him. It’s very much a consumer-banking culture,” another former Merrill executive said. “It was a little bit like oil and water.”

His move to Citi was surprising at first but made sense at second glance, colleagues and observers said.

“Everybody knows that he is an ambitious guy,” the senior wealth-management executive said. “I think he would rather take a moonshot than continue to do what he was doing.”

Sieg got a whopping pay raise, to $11.3 million, for less than four months of work. The paycheck irritated laid-off employees and current ones dealing with reduced expenses and hiring budgets.

While replacing Moynihan was out of reach, succeeding Fraser isn’t a sure bet either. Citi has not indicated who might succeed Fraser, who took over only three years ago. Mayo believes the 56-year-old chief executive will come close to hitting some of her 2026 goals, which would go a long way toward appeasing shareholders. If she doesn’t, he thinks it is far more likely that Citi would look outward for a new CEO than anoint Sieg — perhaps the future runner-up to succeed Jamie Dimon, either Jennifer Piepszak or Marianne Lake.

Everybody knows that he is an ambitious guy.
A senior wealth-management executive

Citi insiders said Sieg had only one credible rival: Viswas Raghavan, the new boss of investment, corporate, and commercial banking. The hard-charging banker joined from JPMorgan in June.

While Sieg has told Citi managing directors to manage up less, a former Merrill executive who worked under him said Sieg was adept at it.

“He’s very astute politically,” he said. “Andy’s going to try to make wealth management do well and subsequently make Jane do well.”

Sieg has been preparing for the C-suite for nearly his entire career.

He spent just over a year in the White House as an economic-policy aide after earning a master’s in public policy at Harvard. (He’d earned his bachelor’s degree at Penn State.) After George H. W. Bush lost his reelection bid in 1992, Sieg turned to a friend of his father’s, Bill Schreyer, a former CEO of Merrill Lynch, to find a new job.

He rose through the ranks, assisting another Merrill CEO, Dave Komansky, who mentored him. Sieg left after 13 years, in 2005, to run Citi’s “emerging affluent” business for customers with less than $500,000 in investible assets. He launched myFi, short for “my financial life,” which offered financial advice online and over the phone. A year later, after the sale of Smith Barney, myFi’s referrals dried up, and it was folded into the consumer bank.

He returned to Merrill in 2009, trying to work with employees of Merrill’s new parent company, Bank of America. For instance, he would meet with clients of the investment-banking arm even if there wasn’t an immediate opportunity for Merrill to get their business. Sieg clinched the top role at Merrill in 2017.

Ex-Merrill executives who reported to Sieg said he was the type of boss to learn your kids’ names and ask about your spouse.

“He is actually warm. He cares,” one said. “You’ll find people somewhat deep in the organization who feel really seen and cared for by him.”

Sieg, who grew up in Bellefonte, Pennsylvania, has two brothers who are also leaders in money management; Phil, the head of JPMorgan Advisors, and Doug, the chief executive of the asset manager Lord Abbett.

While he would meet clients in the office or for business dinners, he wasn’t the type to swing and sip on a golf course. (Sieg doesn’t drink.) Even after the pandemic, you would never catch Sieg in a polo and khakis, former colleagues said. His uniform was a dark suit with a red or blue tie.

“Relationships are a business,” one of the senior executives said.

He was also a demanding boss, they said. Crain recalled that during one monthly business review, Sieg, frustrated with a manager’s results, tried to rip up a disappointing report but failed, as it had too many pages.

“He wanted you all in,” another direct report said. “It’s not a job for the faint of heart or somebody who, in most cases, was looking to make this a 9-to-5.”

David Poole, Citi’s head of US consumer wealth, who previously ran Merrill’s self-directed and hybrid investing service, put it more lightly. Poole described Sieg as a straight shooter who speaks with “some levity.”

“If there’s something that’s identified or agreed upon or a next step, etc., there’s no chance that that’s going to be forgotten. That’s in his mind,” Poole said. “And that’ll be something that you’re held accountable to.”

The ability to succeed Fraser hinges on turning around the wealth division.

Evercore analyst Glenn Schorr said Sieg’s plan to grow the operation and improve its profits was essentially what Fraser had laid out two years ago but failed to do. The unit is barely profitable, with a low return on tangible common equity, a metric used to show how efficiently a business is using its capital.

Shortly before Fraser took over, the bank reorganized its wealth division, putting three businesses under one roof: the private bank; Citigold, the mass-affluent arm; and Wealth at Work, which caters to rich law-firm partners and other executives. Citi veteran Jim O’Donnell was plucked from the markets division to lead the new unit. While O’Donnell was generally well liked, he had no experience in wealth management, and employees described feeling like they were on a ship without a captain.

O’Donnell stepped down in January 2023 and was made vice chairman. Sieg was named his replacement three months later. Most of the employees who spoke with BI said they were hopeful.

“Everyone was very optimistic because we would finally have somebody that understood this business and that it would be a really good thing for Citi,” a former managing director said.

After Sieg’s six-month garden leave, he visited Citi’s far-flung wealth offices. In Singapore, he rolled a pineapple for good luck. His travels have taken him to the United Arab Emirates, Mexico, and London. The ex-managing director said he appreciated Sieg’s visiting the branch in Aventura, Florida, and shaking hands with every employee on the floor. In Zoom meetings, he calls out bankers who consistently make their net-new-asset goals with images of trophies, Poole said.

Amid these shows of goodwill, Sieg has made many changes to the leadership ranks. Four of his 14 direct reports have left since he arrived and another is leaving imminently. All told, at least 22 senior executives have departed.

Speaking at the Morgan Stanley conference, Sieg said “very few” of these exits were regrettable.

“We have had a substantial number of departures, but those departures really come through a level of rigorous self-examination of the business,” he said.

Many employees described the departures as disruptive, particularly that of David Bailin, the chief investment officer. A 19-year veteran of Citi, Bailin is credited with building the sophisticated investment business for ultrarich clients that Sieg wants to grow.

“It knocked me out of my chair,” a former Wealth at Work banker said. “He was the face of all our suggestions.”

Employees were also shocked by the impending exit of Naz Vahid, a Citi lifer who runs Wealth at Work, the division’s fastest-growing unit. During her tenure, it became the 800-pound gorilla in its niche, serving 50,000 lawyers worldwide.

“Naz secured one of Citi’s only best-in-class franchises,” recruiter Phil Waxelbaum said. “The loss cannot be overstated.”

Bailin is starting a family office advisory business. In a memo, Sieg said Vahid planned to spend time on philanthropy.

If he didn’t come here with some kind of wrecking ball, it would go belly up.
Former Citi managing director

Vahid’s position will be taken by Kris Bitterly, the global head of investment products, in September. Former and current employees said she is Sieg’s right-hand woman, and Sieg has described her as one of Citi’s “most high-potential” leaders.

“She is just amazing. She’s just a good soul and smart as a whip,” a former private-bank colleague said. “The problem is they are going to need a couple hundred of her to make it work.”

Sieg has installed two of his former Merrill colleagues so far: Don Plaus as the North American private-bank boss and Keith Glenfield as Bitterly’s successor. He also hired Dawn Nordberg of Morgan Stanley to lead client-referral efforts between the investment bank and the wealth division.

A former managing director applauded the changes.

“He’s definitely making waves because he has to,” they said. “My perspective is the changes are so badly needed, and the company was so badly broken that if he didn’t come here with some kind of wrecking ball, it would go belly up.”

Sieg has shared grand ambitions for growth but has had to spend considerable time cleaning house. He has nixed what he calls “hobbies,” or projects determined to be outside core areas, such as Citi Alliance, a banking and lending product for financial advisors at Edward Jones.

Poole, the executive behind Citi Alliance, said the decision made sense and exemplified Sieg’s laser focus on getting existing customers to invest with Citi. In the US, 65% of Citigold’s 400,000 customers have only deposits with the bank.

“They’re not aware of the value proposition. They don’t have access to certain products,” he said. “We’d rather put our resources, our mindshare, our leadership focus there.”

Sieg was also appalled that Citi Wealth had 600 Bloomberg terminals — twice as many as Merrill did — and cut more than half of the terminals, which each cost north of $25,000 a year. A senior operations leader said Sieg has had to address very basic issues such as employees abandoning projects, issuing a mandate that all projects have milestones.

Most employees who spoke with BI said that they agreed with these moves and that Citi Wealth had over-relied on lending to the detriment of its balance sheet. While Citi has a strong investment business with high-net-worth clients in Asia, it has a lower profile in the US beyond lending and deposits.

“There were a lot of private bankers in the habit of getting by making a couple of big loans a year to clients,” a former managing director in the private bank said. “The revenues looked good, but it didn’t yield the best return on capital.”

Sieg has prioritized investment products as the path to making inroads with existing clients, who the bank says have $1 trillion in assets at Citi and another $5 trillion held elsewhere. He has touted Citi’s alternative offerings for high-net-worth clients, such as financing the development of a skyscraper on Billionaires’ Row in Manhattan. His aim is to grow this business to $100 billion from $20 billion in the next five years.

Three former managing directors described the slew of new goals as unrealistic, as these one-off deals cannot be scaled. One recalled Sieg acknowledging in a meeting that these targets were ambitious but saying they had to start somewhere.

“It’s like you are a three-Michelin-star restaurant,” another ex-managing director said. “You cannot become McDonald’s the next day with that same concept.”

Sieg said at the June conference that only one-third of the division’s advisors were meeting their net-new-asset targets. Mirroring tactics that supercharged Merrill, Sieg has changed Citi Wealth’s compensation scheme to prioritize asset gathering, to the consternation of several employees.

Current and ex-employees speculated that the biggest obstacle to meeting Sieg’s goals could be Citi’s dysfunctional technology, which they said is known as the worst on Wall Street. The audit report, from Ernst & Young, said opening a brokerage account took nine days on average, triple the industry average.

The result of Citi’s burdensome technology, the report said, is “a direct negative impact to our current and prospective clients.”

“We invite them to enter a partnership with us, yet we’ve shut and locked the door, making it difficult to actually do business with us” and disincentivizing clients “to retain their full portfolio and wallet share with Citi,” it said.

The report concludes that the patchwork system also makes it hard to measure progress towards Sieg’s goals such as net-new-asset growth, as there is “no single source of truth for many crucial elements” of Citi’s business.

Sometimes you have to repair the plane while you’re flying it.
Former Citi managing director

Six employees argued that Sieg had put the cart before the horse by pushing for more private-equity deals for clients, given the difficulty of basic customer tasks.

“It’s very difficult for that team member to really convey to that client that you are dealing with a world-class organization,” a former managing director said.

But Sieg cannot afford to wait, a former managing director in the private bank said.

“You don’t want to put the whole business on hold,” he said. “Sometimes you have to repair the plane while you’re flying it.”

Bitterly said Citi was working on some 50 projects to address these technology pain points and that the moves made over the past several months laid the foundation for growth.

“Everyone acknowledged that there was a complexity in our operating model and in our organization where sometimes it was really hard to get things done,” she said. “We now understand our organization at the top of the house, our organization within wealth.”

“It really gives us this ability to look forward and execute,” she added.

The senior wealth-management executive said they doubted that Sieg could meaningfully grow the business because of its size. Citi’s private bank, for instance, has only 125 private bankers in North America; Citizens Bank hired 200 in 2023 alone. But Citi is under multiple consent orders that require the bank to get regulators’ permission for acquisitions, leaving Sieg’s hands tied, the wealth boss said.

“Never say never, but it’s very challenging,” he said.

And while the layoffs have removed layers of management, Sieg can directly control only so much, as Citi Wealth is an international and disparate business, former managing directors said. This is despite Sieg running 90-minute weekly meetings with his direct reports and biweekly meetings with managers one level down to go over every business line and region.

“The problem is that it’s just too big, and you end up surrounding yourself with representatives from this business that fluff you up and tell you a distorted picture of reality,” a former managing director said. “To give the guy credit, he’s tried.”

But some employees haven’t given up.

“He feels like the last great hope inside Citi,” the operations leader said. “If this guy can’t do it, what’s going to be next?”

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