Citadel Marks Thirty Years In Wealth Management

Citadel started in 1993 with 10 employees and today employs 452 people serving 10,680 clients. “Our staff retention rate of 97% and client retention rate of 99% are the two metrics we’re most proud of,” said Citadel CEO, Andrew Möller. 

“We experienced every financial crisis of the past three decades and witnessed how it’s increased the involvement of the regulators. We’ve in fact had more than 30 site visits by the regulator in the past 30 years and passed their inspections each time,” he says. 

Möller, who has been with the 30-year-old wealth management company for 26 years and CEO for the last 10 years, believes their staying power can be attributed to the company’s focus on quality,  reputation and client-centric approach.  

The business model

“We focused our business model on vertical integration. We built everything in-house, from advice and asset management to the solutions teams who run our platforms, marketing, compliance, finance, and the philanthropy unit. This gives us complete control over the quality of everything we do, our fee structure and the reputation we have in the industry. We can’t hide behind any third party, because there is no third party,” says Möller.

“For this model to work, there absolutely has to be a value exchange between clients and advisors. We have to be self-regulating to ensure our competitiveness. Our high-net-worth clients trust us because we’re all-in, all the time.”

The business is built on a range of integrated solutions for individuals and businesses, which includes investment advice, asset management, fiduciary services, risk planning, private client securities, foreign exchange services and treasury management, offshore structuring and philanthropic donor advice. The Citadel Philanthropy Foundation became the first donor-advised fund of its kind in South Africa in 2013. 

A new family office

The 2023 Africa Wealth Report reveals that family offices are increasing in popularity worldwide as  they provide a more customised offering to ultra-high-net-worth individuals (UHNW) with services extending beyond traditional wealth management such as family education management, property management, family foundations and trusts, etc. Ahead of the trend, Citadel in collaboration with SwissIndependentTrustees recently launched a family office solution. “We understand the needs of these families – they need more complex offshore structuring and investments, and the protection of the family brand, constitution and legacy are paramount.” 

Five trends for the next thirty years

Möller says the following five trends will drive the financial services industry forward over the next three decades: 

• The focus must remain on personal advice, supported by other complementary services in one holistic offering based on what clients needs. 

• Advice-led businesses with strong risk management capabilities are more important than ever before. Experience is key to navigating volatility as a result of almost back-to-back catastrophies, otherwise known as the ‘parmacrisis.’ “ChatGPT can never compete with the wisdom of an excellent advisor or investment manager who has already navigated numerous financial crises.”

• Investments in cyber security and technology efficiencies need to be prioritised. “The client’s time is precious, so you don’t want to waste it on paperwork. Rather spend the time with clients to get to know them and what they need to align the investment strategies with the clients’ value systems and priorities.”

• With the significant transfer of wealth we are about to see, getting to meet and understand the next generation and what’s important to them is essential for intergenerational wealth and legacy planning. “People are living longer, some of their heirs are in their 60s and already have their own relationships with advisors, so you are basically pitching for their business by showing you can align their inheritance with their personal goals.” 

• Client-advisor relationships must be based on trust and be highly-personalised. According to Möller, Citadel is able to maintain a 99% client retention rate, because their clients trust their advisors “for their discretion, wisdom and loyalty”. “Our advisors are often trusted with more information than what our clients share with their business partners, spouses and children, because they need help navigating complex financial, family or business dynamics.”

“We understand that wealth is hard to come by, and ultimately, it’s not just about how much you have, but what you do with it that makes the real difference. True wealth is the freedom to choose the content of your next chapters,” concludes Möller.