Financial Advisory - South Africa

Assets under Management in the Financial Advisory market are projected to reach US$594.30bn in 2024.
Assets under Management are expected to show an annual growth rate (CAGR 2024-2029) of 0.42%, resulting in a market volume of US$606.80bn by 2029.

Definition:

Financial advisory is the process of providing guidance and recommendations to clients regarding their financial decisions. Financial advisors use their expertise and knowledge to help clients make informed decisions about their investments, retirement planning, taxes, insurance, and other financial matters. The Financial Advisory segment encompasses the revenues generated by this service by both financial institutions and advisors, and includes the number of financial advisors, average revenue per advisor, and assets under management (AUM).

Traditional Wealth Management (non-automated wealth management services)
Traditional Investment, incl. Financial Advisors
Banks, Financial Institutions, and Financial Services Companies
B2C & B2B Revenues
Full-Service Products for Insurance, Investing, Lending, and Trading

Commercial Assets or Assets Under Custody
Digital Wealth Management (automated wealth management services)
Digital Investment, incl. Robo-advisors and Neobrokers
Independent Financial Advisory Companies
Independent Financial Advisors (IFAs)
Retail/Non-Professional Investors

The Financial Advisory market in South Africa has been experiencing significant growth in recent years, driven by a combination of customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. Customer preferences in South Africa have shifted towards seeking professional financial advice due to increasing complexity in the financial landscape and a growing awareness of the need for long-term financial planning.

South African consumers are becoming more educated about the benefits of seeking financial advice and are actively seeking out advisors who can help them navigate the intricacies of investment options, retirement planning, and risk management. One of the key trends in the South African Financial Advisory market is the increasing demand for holistic financial planning services. Clients are looking for advisors who can provide comprehensive advice across multiple areas, such as investment management, tax planning, estate planning, and insurance.

This trend is driven by the desire for a more integrated approach to financial planning and the recognition that different aspects of personal finance are interconnected. Another trend in the market is the growing popularity of fee-based financial advisory services. South African consumers are becoming more aware of the potential conflicts of interest inherent in commission-based compensation models and are seeking advisors who are transparent about their fees and work in their best interests.

This trend is in line with global movements towards fee-based advisory models, driven by regulatory changes and increased scrutiny of the financial industry. Local special circumstances in South Africa also contribute to the development of the Financial Advisory market. The country has a large and growing middle class, with increasing disposable income and a desire to secure their financial future.

Additionally, South Africa has a well-developed financial services industry, with a wide range of products and services available to consumers. This creates opportunities for financial advisors to provide tailored solutions to meet the diverse needs of clients. Underlying macroeconomic factors also play a role in the development of the Financial Advisory market in South Africa.

The country has a stable and well-regulated financial system, which instills confidence in consumers and encourages them to seek professional advice. Additionally, South Africa has a relatively high savings rate compared to other emerging markets, creating a pool of potential clients for financial advisors. In conclusion, the Financial Advisory market in South Africa is developing due to customer preferences for professional advice, trends towards holistic financial planning and fee-based services, local special circumstances such as a growing middle class and a well-developed financial services industry, and underlying macroeconomic factors including a stable financial system and a high savings rate.

This growth is expected to continue as South African consumers increasingly recognize the value of financial advice in achieving their long-term financial goals.

Data coverage:

The data encompasses B2C enterprises. The figures are based on gross revenues, assets under management, and user & advisor data of relevant services and products offered within the Wealth Management market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research activities (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, gross national income (GNI), consumer spending, total investment (% of GDP), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Private wealth management has developed significantly in recent years as a result of the growth of affluence worldwide. The number of millionaires in North America more than doubled between 2010 and 2022. A similar trend can be observed in the Asia-Pacific and Europe. The total wealth of the adult population in Europe has steadily increased since 2010. Private Wealth Management is an increasingly important service as the rate of wealth continues to increase among the general population and affluent high-net-worth-individuals. Coupled with the recent developments in the Fintech market, this has helped to open up new Private Wealth Management products and services to people with smaller amounts of disposable income and expanding services offered to larger clients.