Finance will be more competent than my white counterpart

Luthuli Capital was founded and structured as a Pan-African multi specialist company that offers a global approach to wealth management portfolios. The company offers investment advisory services to local and foreign individuals and multinationals, among others. I’m joined in the studio by one of the co-founders, Mduduzi Luthuli. Thank you so much for your time.

MDUDUZI LUTHULI:  Thank you for the invitation. Glad to be here.

NASTASSIA ARENDSE:  Let’s take it back to the beginning and start off with how Luthuli Capital came together.

MDUDUZI LUTHULI:  I think if you are going to start a company it’s always something that’s there. It’s just a matter of acquiring the skills for you to be confident to run the company and wait for the circumstances to be there.

I’ve been in the corporate sector now – from banking into the financial advisory industry – for about seven years. My previous employer gave me a great opportunity in management and it’s really there where I got to cut my teeth and get to the point where I realised I think it’s time for me to go out there and do this on my own.

We’ve got two offices here in Sandton and one in Durban. It really was the Durban office that was also the big motivator because we’ve got a project going on down there which involves the internship, and that also just got to that point where, if ever you are going to do this, this is the time.

NASTASSIA ARENDSE:  And I know that you work with Trudy as well. How did the two of you decide that it’s our synergies and both our characteristics and everything we’ve learned from our own sort of corporate size that can work together – and let’s do this?

MDUDUZI LUTHULI:  We both come from the same industry. So from a product knowledge side, services, the competency was there. I think really where the synergy comes from is they say I’m the driving force, I’m the bully, I’m the hard-core one. My real talent is bringing the clients into the business, going out there and selling the dream and convincing them that this is something you should back.

And Trudy, as head of client services, is the mother of the business, if I can put it that way. And really her strength is in client retention. You play a fine balance between finding new clients and also looking after your existing clients. And that’s really where we work with each other’s strengths and work very well together, because she heads up the client retention. I bring them and she looks after them.

NASTASSIA ARENDSE:  How competitive is the industry that you are in right now?

MDUDUZI LUTHULI:  It’s extremely competitive. I don’t think I have the words to truly describe how competitive an industry it is. One of the fantastic things and one of the shining lights about South Africa is that we have a very good financial system. Or let me say that the governance and the legislation here is very good and that really translates into the financial advisory system with the initiatives that the FSB puts out there – the financial planning institution, to make sure that as financial advisors or wealth managers we move away from a culture of just selling for the sake of selling, and seeing ourselves and conducting ourselves as professionals and as a professional field.

So now you are working in an industry where you have exceptional professionals, people giving advice. And really you have to convince the client as to say why you. And I would even say you have very established players, your Allan Gray, your Stanlibs of the world, your Old Mutual, your Liberty. So as a new company going after clients and acquiring big clients, there’s already someone existing there, giving them advice; there is really an existing relationship. Now you have to convince them to say: what am I bringing to the party that will convince them? It’s very competitive.

NASTASSIA ARENDSE:  Before we get to the internship programme – and we were talking about the financial industry – there is a lot of talk. You have Absa talking about it, you get a lot of industry professionals talking about transformation in the financial services industry. Some argue it from the point of we need more women to come on board and be fund managers, portfolio managers, etc. Others say we are all competing for the same pie, a little bit more, etc. What are your thoughts on transformation in the financial industry?

MDUDUZI LUTHULI:  It’s definitely something that needs to be looked at. I would challenge anyone to go to any investment seminar, whether it’s held by the FSB, the Financial Planning Institute or the big players, and the reality is the room will be dominated by white Afrikaans males over the age of 45.

The nice thing about going into our business is that it also allows you to do proper succession planning, estate planning. And all that means is if I start my company and I run it well, I now have the opportunity to pass it on to my children – to say, listen, I’ve started Luthuli Capital, it’s been going for 30 years. Don’t go and study law or art or whatever. Take over the company. So you have these established players and they are now bringing in the second, third generation.

The reality of the country is we might have political freedom, but we certainly don’t have economic freedom. If you look at the mass population, where is the money still sitting? So it’s a matter of me not just coming in and saying look, I’m competent, I know how to do this, but it’s how do you then infiltrate this private club. Or the other way to look at it is how we get money to flow out of a few hands to the mass population – and thus that gives me a new market to work with.

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