Wealth in South Africa: HNW Investors 2017

2017-05-02
Price :
Published : May-2017
No. of Pages : 49

More than 40% of South African HNW investors generated their wealth through earned income, mainly through manufacturing and the real estate (property sector). Most HNW individuals opt to have their assets managed by a professional, driven by a lack of expertise.

However, clients who self-direct their investments do so mainly to avoid management fees and to retain exclusive control over some of their portfolio. Equities are the preferred asset class, but property, alternatives, and cash are forecast to experience notable increases over the next 12 months. Demand is quite pronounced for pension and inheritance planning, and a strong increase in demand is forecast across all planning services.

Key points to note –

  • Expats account for a below-average proportion of the HNW population, with UK HNW migrants accounting for the majority.
  • While equities dominate, demand for alternatives is forecast to rise rapidly as investors are looking for new means of diversification.
  • Despite a strong preference for discretionary mandates, 21.5% do not place their assets with a professional manager, which is double the global average.
  • Demand is strongest for pension and inheritance planning services, and will increase further increase over the next two years, along with demand for financial planning services.

Critical success factors of South Africa HNW business –

  • Tailor services to the professional client base: Almost half of South African HNW investors accumulated their wealth through earned income – a considerably larger proportion than the global average. Wealth managers will do well to provide services tailored to the lifestyles and investment goals of their professional client base.
  • Target the expat population: Despite being lower than the global average, expats constitute a notable proportion of South African HNW residents. Solutions such as offshore bookings services in the UK will prove to be successful, since British expats constitute nearly two thirds of South African HNW expats.
  • Diversify your planning services offering: Demand is very strong for all planning services and is forecast to grow even further. Advisors will do well to develop a broad service offering able to meet diversified planning demands.

The report “Wealth in South Africa: HNW Investors 2017” analyzes the South African investment market, with a focus on the HNW segment and analyzes which asset classes are favored by South African investors and how their preferences impact the growth of the total savings and investments market. Additionally, it examines HNW clients’ attitudes towards non-liquid investments such as property and commodities.

Companies mentioned in this report: Mercantile Private Bank, Credit Suisse, Friends Provident International, Aviva, SIPP, Charles Schwab, Anglo American, BMW, Ford, Toyota, Savills, Nedbank.

Scope

  • Expats account for a below-average proportion of the HNW population, with UK HNW migrants accounting for the majority.
  • While equities dominate, demand for alternatives is forecast to rise rapidly as investors are looking for new means of diversification.
  • Despite a strong preference for discretionary mandates, 21.5% do not place their assets with a professional manager, which is double the global average.
  • Demand is strongest for pension and inheritance planning services, and will increase further increase over the next two years, along with demand for financial planning services.

Reasons to buy

  • Benchmark your share of the South African wealth market against the current market size.
  • Forecast your future growth prospects using our projections for the market to 2020.
  • Identify your most promising client segment by analyzing penetration of affluent individuals in South Africa.
  • Evaluate your HNW proposition by understanding how the South African tax system will impact HNW clients.
Filed in: Banking & Finance, Wealth Management
Publisher : GlobalData
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