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Citadel CEO defies industry norms

16 May 2022 Citadel
Andrew Möller, Chief Executive Officer at Citadel

Andrew Möller, Chief Executive Officer at Citadel

How Citadel’s Chief Executive Officer (CEO), Andrew Möller grew the company’s assets under management (AUM) by over 250% in less than a decade.

When Citadel’s CEO Andrew Möller took the reins of the company almost 10 years ago, he looked forward to the countless challenges and milestones, knowing that agility and ability to ‘execute’ would be a core aspect of his role. The average South African CEO tenure is 4.3 years, but Möller has more than doubled that with his hands-on approach. Unlike so many other CEOs in the local financial services industry who are chartered accountants or actuaries, Möller comes from a legal and wealth advisory background. The long-time Citadel employee and former Head of Wealth Management saw the specialist wealth management company’s assets under management grow from R22.7-billion in 2013 to R80-billion in 2022.

MANAGING THROUGH VOLATILITY

When Möller stepped into his role in 2013, the world was still reeling from the 2008 global financial crisis, and it was important for financial services companies to show confidence by proving their sustainability and operational resilience. “The crisis ushered in an era of heightened regulations with regards to pricing and commoditisation of products in the wealth management industry. We made it our focus to offer the best value by providing premium quality service in order to build lifelong relationships with our clients,” says Möller. It was this approach that cemented it’s 99% year-on-year client retention rate.

In the same decade, many other world and national events took place that would give most CEOs sleepless nights. The Capetonian, who was born and educated in Durban, however says: “Volatility can be unsettling if one doesn’t have it factored into your investment strategy. We are an advice-led business and people rely on that advice in times of crisis. Our asset management team is very focused on scenario planning and strategy so that we can identify investment opportunities in various market cycles.”

Citadel’s business model has always been about building long-term partnerships with clients, so when the COVID-19 pandemic forced companies to rethink how they do things, Möller was initially unsure if online interactions would work. “However, both clients and employees embraced the change and client relationships appear to be stronger than ever,” he says.

In fact, Möller believes the key to Citadel’s success is the team’s ability to make their client base feel heard and understood through every stage of their lives, providing peace of mind that their investments, estates and other facets of their financial lives are being taken care of in one place. “Since our business is all about relationships, we take it very seriously if a client complains. Our quality of service and value proposition is everything – we’re big enough to service all the wealth management needs of our clients, but still small enough to have close relationships with clients,” says Möller.

THE INGREDIENTS FOR UNUSUAL BUSINESS LEADERSHIP LONGEVITY

Möller took office during a critical time as Citadel’s focus began to shift. “It was a recalibration. We wanted to change the strategic direction of the business and focus on our unique structure. We are a focused wealth advisory business with in-house asset management capabilities, and the shareholders saw this when they appointed me from an advisory background. It also focused my mind on what I had to do and be,” he says.

The company decided that having a CEO with line function would be key to its refocused approach – and this is where Möller made his mark. “I wanted to retain line function on certain initiatives I wanted to see through. It enables me to have sight of the everyday operations so that I can answer the questions to the board. On certain key areas of the business – I’m 100% accountable to my fellow directors. It’s a big part of making the job more enjoyable – to be active and not in an ivory tower. It helped me retain a passion and implement ideas I felt strongly about. However, it is my exceptional team and their capabilities who have enabled me to lead in this style.”

Möller’s high job satisfaction stems from the family culture in the business. “It may sound trite, but we are the closest thing to a family business that, in fact, is not one and we support each other at all levels of the business. The average tenure on our executive committee is 16 years. We work as a team and are accountable to one another to give our best. We have a culture of accountability and self-ownership,” says Möller.

Citadel has a full-service offering encompassing investment advice, asset management, fiduciary services, treasury management and philanthropy and it is its clients that benefit from having these specialist services under one roof as advisors work closely together and communication is more tailored and holistic.

LOOKING TO THE FUTURE

“There is a big transfer of wealth taking place in the world right now, and we are responding to that market by being cognisant of younger clients’ Environmental, Social and Governance (ESG) concerns and value systems,” says Möller. He acknowledges that in the next few years issues of industry regulation and client expectations specifically pertaining to responsible investing and climate risk, would become critical. While many of their clients are high-net-worth retirees, their children – who are Citadel’s new generation of clients – care deeply about the health of the planet, as well as more personalised yet streamlined services.

Citadel is now focusing on creating digital touchpoints for clients, by providing software and other technological tools that younger clients like to use to manage their portfolios. “Younger clients appear to be more reactive and are interested in using advisory online tools to manage the big events in their lives, but relationships will always remain the heart of the business. That is why we are investing heavily in machine learning and artificial intelligence, alongside experientials – things they can’t experience by themselves – as well as quality advice and value exchange.”

Möller believes the key to longevity for the business is simply being focussed on its core differentiators. “There are other businesses out there that say that they do what we do and they do, do what we do, but importantly unlike us, its not all that they do and that is what I believe sets us apart. Not trying to be too many things to too many people is important. One of our strategies very simply is to spend more on digital, so the work-from-home strategy has without a doubt eroded a significant portion of our cost base and we have not taken that and just declared dividends – we have reinvested it in the business to accelerate certain programmes…that make it easier to onboard clients, that make it easier for clients to give us instructions, creating self-help modules and cybersecurity vaults for clients,” says Möller.

Quick Polls

QUESTION

There are countless articles written about South Africa’s poor retirement outcomes. Which of the following would you single out as the biggest contributor to local savers not accumulating enough to buy an adequate and sustainable pension?

ANSWER

Lack of personal accountability
Poor participation in formal retirement funds
Reluctance to seek financial advice early on
SA’s high unemployment rate
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