Top Four Citi Private Bank Interview Questions
Citi has always been one of the largest players in the wealth management space within the United States. However, it has historically been quite bifurcated within the firm -- with almost entirely separate infrastructures for their "consumer group" and their "institutions group".
However, just over a year ago Citi - in their attempt to double down on their wealth management practice - combined everything under the umbrella of Global Wealth, which is housed within Citi Private Bank.
The reason for bringing this up is because one of the benefits of joining the wealth management division of a large investment bank - beyond the higher base salary as a junior and access to lots of resources - is the ability to observe many different roles and lateral to one that perhaps better suits you.
For example, if you join an independent wealth management shop that deals with people with a net-worth between $1m-$10m you may very well not like it. But you shouldn't conclude that wealth management, in its entirety, is wrong for you. Rather, you could work better in a large team handling UHNW clients (or in a research role that facilitates the work of more client-facing wealth managers). By being at a place like Citi - or Goldman, UBS, Credit Suisse, etc. - you get to see all of these roles and potentially move around if so desired.
Citi Private Bank Interview Questions
While there are a number of different style of roles within Citi Private Bank - from pure wealth management to more support-oriented ones - the following questions seek to be widely applicable. You should always come prepared to talk about current market themes, or to give answers to more classic technical interview questions with a current market spin on them.
This is a bit of a trick question. Your interviewer is using the phrase "financial markets", but almost everyone answering this will only talk about equity markets. This is a big mistake. One of the best ways to stand out in interviews is by talking about markets outside of just equities.
So, let's first deal with equity markets since that will be where most clients have most of their wealth tied up in. When the Fed raises rates - and the entire yield curve lifts up - that will generally be negative for equities as future free cashflows become less valuable (as the rate their discounted by will be going up).
In particular, this will negatively impact growth stocks, like many in the tech space, because most of their value (enterprise value) is tied up in long-dated free cashflows that are more sensitive to changes in the discount rate (the weighted average cost of capital).
Moving over to the treasury market, with the Fed raising rates that will likely (but not certainly) cause the entire yield curve to begin creeping up. When yields go up, prices go down for existing treasury notes.
Moving to the corporate bond market, the same idea holds true. Outstanding corporate bonds will have their yields go up, which means their prices will go down.
Where there's more ambiguity is in real assets (like housing) and commodities, where raising rates can have both positive and negative impacts on price levels. So, we can't say much definitively here without going down a rabbit hole. For interview purposes, I'd just touch on equities, government bonds (treasuries, in the United States), and corporate bonds (keep in mind that corporate loans are floating rate, so will be less impacted than bonds which are fixed rate).
What kind of work environment are you looking for and does Citi Global Wealth / Private Bank align with that?
In any kind of private banking or wealth management interview, you'll get a number of "fit" related questions. These can seem like they have no wrong answer, but there are always certain themes that you should try your best to hit on.
What you should say is that you're looking for an environment where you have access to the most resources possible - in terms of research, tools, and people - so that you can learn as much as possible. By joining a full-service bank like Citi, who has a dominating position in the wealth management space - you'll get this.
Further, you should bring up that while you know that the role of a wealth manager, later on in one's career, necessitates being quite independent, you love the idea of coming in at a junior level and being able to help those around you in whatever capacity that you can.
Ultimately, the right attitude to have whenever you're asked questions like this is one of considered eagerness. Meaning you have thought seriously about this as a career path - and aren't just looking to join a prestigious firm - and that you are eager as a result of that serious thought.
There are few things that clients worry about more than inflation. This is true of clients with quite modest wealth, and clients of extreme wealth. This shouldn't be overly surprising. The old saying is that inflation is a hidden tax, and no one likes paying tax!
This is a great question to ask not only because of it actually comes up in the real world, but also because how you answer it helps to demonstrate implicitly whether you understand the role of a wealth manager.
Your role will be to be patient and commiserative with your clients, but also try to persuade them in a sound direction (meaning: making sure they don't liquidate all their holdings and put them into gold).
If your client is quite concerned, you can come up with a plan to ensure that they have a certain amount of their portfolio linked to inflation. Either via structured products, or by inflation-linked government bonds (which are called TIPS, in the United States).
One of the main worries of clients regarding inflation is the erosion of their wealth, which could mean not being able to draw as predictable a level of funds per year during retirement. For many, just having part of their portfolio linked to inflation - so it, by definition, won't erode from it - is enough to assuage their concerns.
This is another slightly tricky question. As I've written elsewhere, you can always feel free to give your opinion on where you see the Fed moving over the next year.
However, you should always begin your answer by talking about the consensus view of market participants. For example, as of this writing by the end of the year market participants think the Fed Funds rate will be around 1.25-1.50%. By looking at Fed Fund futures, you can actually see how likely market participants think the next several rate hikes are. For example, if Fed Funds futures show the rate at 0.25% higher than it is right now next month then one rate hike is fully priced in which the next month.
Ultimately, it's always a good idea to say where market participants think the Fed Funds rate will be over the next year - which you can usually find from a quick search, as Bloomberg or Reuters will often discuss it - and then give your view. So, you could say that you think inflation is running a bit hotter than even market participants realize, or won't be cooling nearly as quickly as some think, so the Fed will be forced to raise more quickly than is currently priced in.
No one expects you to have a perfectly formed view. If you can just reference what the market consensus is - as I've laid out above - you're already ahead of 99% of those interviewing.
The reality is that Citi has an incredibly strong wealth management franchise. With their recent consolidation and rebranding, joining Citi Private Bank / Citi Global Wealth is a great choice. You'll have access to all the resources that come along with a global brand, while also being able to put a strong name on your resume (which is always helpful for if and when you go to another firm down the road).
Hopefully these interview questions have been helpful. If you're looking for even more interview questions, I've put together a longer list of wealth management interview questions along with asset management interview questions (which can be a bit more technical). I also wrote a little wealth management book which categorizes almost all the potential questions you could be asked and provides in-depth answers.
If you're currently gearing up for interviews, I wish you the best of luck.