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. The industry expects even further growth as the number of South African HNWIs is forecast to increase by 28%, to reach approximately 56,000 by 2027.
Figures from the GlobalData Global Wealth Managers Survey shows that South African HNW clients’ lack of expertise is the main reason driving advisory mandate uptake.
Also, 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.
South Africa’s wealth management market is also positioning itself a potential hub to other African wealth management markets.
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. The country is also home to 43,600 HNWIs, each with net assets of US$1m or more.
However, only 5 people are worth more than $1bn in South Africa.