South Africa wealth management

South Africa has over twice as many HNWIs as any other African country, and looking ahead the country’s wealth management market has strong fundamentals for growth. After good performance in 2017, when HNWI volumes in the country rose by 8% to reach 43,600, the number of South African HNWIs is forecast to grow solidly by 28%, to reach approximately 56,000 by 2027. This means there is a bullish picture for South Africa wealth management activities. 

 South Africa’s wealth management market is well positioned for success because it is a potential hub to other African wealth management markets, it has one of the biggest stock exchanges in the world and a well-developed wealth management, fund management and banking system.

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South Africa wealth management 

 Total private wealth held in South Africa rose from US$670bn at the end of 2016 to US$722bn at the end of 2017, whilst HNWI wealth rose from US$284bn to US$306bn.

 Nearly 70% of the industry participants GlobalData Financial Services interviewed forecast an increase in demand for advisory mandates.

 Data collected from the GlobalData 2016 Global Wealth Managers Survey shows that South African HNW clients’ lack of expertise is the main reason driving advisory mandate uptake.

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 Meanwhile, 50% of wealth managers believe demand for automated investment services will increase over the next two years.

 GlobalData shows HNW investors are forecast to increase their allocations in alternatives because they are looking to diversify their portfolios.

 Wealth managers anticipate that demand for the pension planning will pick up, albeit at a slower pace than for the other planning services. Overall, an increase in demand is expected for all planning services, with pension and financial planning set to be the top performers.

 Fast facts

  • Total private wealth held in South Africa amounts to approximately US$722bn. Around US$306bn of this is held by HNWIs
  • The average South African individual has net assets of US$12,900 (wealth per capita), which is the 2nd highest level in Africa, behind Mauritius
  • SA is home to 43,600 HNWIs, each with net assets of US$1m or more
  • SA is home to 2,200 multimillionaires, each with net assets of US$10m or more
  • SA is home to 5 billionaires, each with net assets of US$1bn or more

 A report by AfrAsia Bank notes things that attract and keep HNWIs in SA include:

  • Lifestyle aspects: wildlife, beaches, weather and scenery.
  • A good private healthcare system.
  • Top class private schools for their children.
  • Top class shopping centers (examples: Sandton City, Gateway, Montecasino, V&A and Hyde Park).
  • English speaking country.
  • Fully developed luxury market, where most of the major luxury brands are available.
  • Large number of luxury holiday destinations within country (examples: Kruger Park, Cape Town, Umhlanga, Ballito, etc.).

 For an in depth view of South Africa wealth management activities read PBI’s feature:  South Africa’s powerful wealth attraction