MDUDUZI LUTHULI: Accountability is secret sauce of wealth management

I still remember the sting of losing a wealthy client. It was a wake-up call that forced me to confront the harsh reality of my own shortcomings. Despite our top-notch service and the impressive performance of the client’s portfolio, they left without hesitation. The reason? I had been focusing on the wrong things. 

For years my team and I worked tirelessly to address complex issues, fine-tune their portfolio and co-ordinate with their accountant and attorney. But when we met our conversations centred on market performance and account growth.

I was so focused on showcasing our investment expertise that I neglected to highlight the other essential services we provided. In doing so I inadvertently reduced our value proposition to just investment performance. 

The truth hit me like a ton of bricks. I had been prioritising the wrong things, neglecting the client’s overall financial goals and wellbeing. I failed to show them how to measure our accountability. Accountability, I realised, is the unsung hero of wealth management. It’s the secret sauce that delivers results, builds trust and fosters long-lasting relationships. 

But accountability is hard. It requires a level of vulnerability and humility that doesn’t come naturally to many of us. It means admitting when we’re wrong, taking ownership of our mistakes, and being willing to adjust course when necessary. It means putting the client’s needs above our own ego and interests. 

Few people can be accountable to themselves for long, especially when they are doing something they don’t enjoy and that doesn’t come to them naturally. We all know financial planning isn’t the most exciting topic and is seen by most as a chore — something that proves I’m a responsible adult — as opposed to something they want to do.

Get results

In that sense, financial planning is similar to working out. We all know it’s good for us, but few actually do it properly and consistently enough for it to yield the desired outcome. Who loves those first gruelling workout sessions on machines they don’t understand? Who continues to love their workouts when they’ve been doing it for several months with only marginal results? 

But those who invest in a trainer are the people who get results. And they get those results because they are accountable to someone to whom they paid good money. And this is our role as a wealth manager. Accountability delivers results. People pay for results. 

Here’s where accountability goes off the rails for many of my peers and colleagues: we are focused so much on “done for you” services that we undervalue — and therefore undermine — “done with you” services such as accountability. This is how I lost my client.

True accountability is coaching. And coaching is different from teaching. Teaching is done from an established curriculum, and teachers are responsible for making sure their students learn the material in that curriculum. Coaching meets students — or clients — where they are individually and guides them to the results they are seeking. The client does the work; the coach is there to provide insight and accountability. 

This is how you do accountability right:

• Meet your clients and ask the right questions to get a baseline for where they stand in their life. Our value starts with a series of questions we ask during our initial call with a prospect. You cannot solve a problem you cannot quantify.   
• Help the clients identify the goals they want to reach. You don’t set the goals for them. You can challenge the goals if it is not aggressive enough or if it is too ambitious for the client’s baseline, but it’s up to the clients to state their goals. 
• Set up a system to document the goals and measure results. This doesn’t have to be fancy: a spreadsheet or a shared document will work.  
• Review progresses each time you meet your client. Adjust the plan if necessary. This isn’t a curriculum; you’re allowed to accommodate for the unexpected.

As I reflected on my mistakes I realised that accountability is not just about doing the right thing; it’s about being accountable to someone. It’s about having a system in place that measures progress, provides feedback and encourages growth. It’s about being a coach, not just a teacher. 

That’s what I failed to do. I failed to provide accountability. I failed to be a coach. And I paid the price. 

Accountability, I learnt, is not just a buzzword, it’s a business model. It’s a way of doing business that prioritises the client’s needs above all else. It’s a way of building trust, fostering relationships and delivering results. 

If you want to build a successful wealth management practice don’t just focus on investment returns. Focus on accountability. Focus on being a coach, not just a teacher. Focus on delivering results, not just promises. 

In the end, accountability is what sets us apart. It’s what makes us unique. It’s what makes us valuable. 

• Luthuli is investment management director at Luthuli Capital.