Citi caters to multimillionaires' kids
A new website offers special account services to the wealthy. Example: An alarm to parents if children spend family fortunes too quickly.
Any kid can open a regular ho-hum checking account, but one major bank is testing special online account services for the offspring of the very wealthy.
Bloomberg reports: "Heirs to Citigroup's wealthiest clients can log in to parent-funded accounts for discretionary spending, investments and 'one-click giving' to charities."
One of the primary goals, according to Tile Financial, which developed the tool, is -- and we are loosely paraphrasing here -- to help build customer loyalty with the tykes so they'll leave the money where it is when Mom and Dad go to the big bank vault in the sky. The online service is offered only to the children of clients of Citi's Private Bank. (If you have to ask what that is, you can't afford it.) Post continues after video:
To us, it's yet one more thing that sets the very wealthy apart from regular folks. As Brett Arends said in a MarketWatch piece: "The United States has one of the most unequal income distributions in the world. . . . We may think of Russia as the land of oligarchs, but America's inequality is actually slightly greater than Russia's." That's based on a CIA analysis. But we digress.
What can little Richie Rich expect from Citi, which, Bloomberg points out, is 18% owned by the federal government? The services of the website, called Spend Grow Give, include:
- Spending accounts with debit cards.
- Help from the parents' personal banker to develop an investment portfolio.
- One-click giving to charities on a preapproved list.
- Alerts -- still in the planning stage -- to parents when the kids go through their money too fast.
- A $150 annual fee.
You can see an explanatory video here.
Tile founder Amy Butte said she developed the site to help the wealthy teach their kids about managing money -- a learning challenge families of all income levels face. (In fact, Teresa Mears reported this week, kids really want their parents to instruct them about these matters.)
Plus, there's that bank customer-loyalty thing. "Inter-generational wealth transfer is a very big issue for the industry," Butte told Bloomberg. (It would be huge if the death tax doesn't come back.)
Actually, it sounds like a natural progression for private banks, which have been known to provide investment education for clients' kids.
And, in all fairness, parents with more-modest means can also find help to monitor their children's spending. Some prepaid cards, like Visa Buxx, allow them to keep tabs on how much is spent and where. None, to our knowledge, has an investment component.
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