Wealth management is an ever-changing industry and the businesses and advisers that are adaptable enough to these changes are far better positioned to provide clients with the best advice to manage their wealth.
Financial advisers play a vital role as they are entrenched in these changes and are effectively becoming coaches for their clients’ financial needs. Technology is disrupting a number of industries and wealth managers in particular need to blend the use of technology with the personal element of advice in to help clients navigate their needs. These needs can evolve quite drastically over time and a particular area where this has been prevalent is with high-net-worth individuals.
High-net-worth individuals are normally classified as individuals with a net worth of USD1 million or more. According to the latest Africa Wealth Report published by Henley & Partners, South Africa is home to the highest number of high-net-worth individuals (or dollar millionaires) in Africa, more than double that of any other country on the continent. The number of millionaires, however, has reduced by 21% over the past 10 years due to various factors but most notably poor economic growth and emigration.
The report also highlighted some interesting trends developing in the high-net-worth sector, with ecologically friendly hobbies being highlighted as an increasingly popular trend within this sector. Collecting of classical cars are also forecast to become increasingly popular, especially in South Africa. From a wealth management perspective, family offices are expected to increase in popularity, and this often extends past traditional wealth management to include things like family education management, intergenerational wealth transfer, and legal and tax services. These offices typically cater for very specific needs over several aspects of the individuals’ financial ecosystem.
PWC in their High-Net-Worth Investor survey of 2022 indicated something very interesting. Their research found that nearly half of the investors that took part in the survey indicated that they were planning on changing their relationship with their current wealth manager. Clearly indicating that these relationships aren’t as sticky as one might think. The reasons for switching managers, however, is far more interesting with 28% highlighting the previous managers inability to support the clients changing financial circumstances and 22% looking for improved digital capabilities. This survey was only conducted in the U.S but it does highlight the need for wealth managers and advisers in this sector to be adaptable and to utilise technology not only to their benefit but also to the benefit of their clients.
With Momentum Investments investing is personal, and we believe that the human element of financial advice cannot be replaced. Adding that personal touch is not only something that clients need, its something they are yearning for. With the African wealth management market expected to grow by an astounding 60% over the next decade there surely are a number of opportunities for wealth managers and financial advisers to leverage from.
One of those opportunities is offshore investing, which can be a powerful tool for South Africans who want to protect their wealth, plan their estates and enjoy an international lifestyle. We recently introduced the all-new, revamped website for Momentum Wealth International, our offshore investment platform for financial advisers, wealth managers and clients in South Africa and beyond. Investing offshore can seem tricky, but with more than 20 years of delivering excellence and the latest technology at your fingertips, we make it a personalised journey for you.
Visit momentum.co.gg to explore our new look website for yourself.
Sources:
Africa Wealth Report 2023, Published by Henley & Partners, March 2023. Accessed 16 June 2023.
https://www.henleyglobal.com/newsroom/press-releases/africa-wealth-report-2023
PWC HNW Investor survey 2022. Accessed 16 June 2023.
https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/high-net-worth-investor.html
Momentum Wealth International Limited (FSP 13495) is an authorised financial services provider in terms of the Financial Advisory and Intermediary Services Act No 37 of 2002 in South Africa. Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services and registered credit provider (FSP 6406).
