Wealth Management
Wealth management is a comprehensive service that helps you grow and protect your wealth. Read our guide to learn more about wealth management in South Africa and its benefits.
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Over 37,000 high-net-worth individuals (HNWIs) live in South Africa — the highest of any African country.
HNWIs are commonly defined as those with at least $1 million or more in liquid, investable assets. Those with a high net worth tend to have more complex financial needs. As such, they require a more comprehensive approach to financial planning.
This is where wealth management comes in.
Read on to learn what wealth management is and how it can help you grow, preserve and protect your wealth.
What is wealth management?
Wealth management and financial advice are two terms often used interchangeably. While there is some crossover, they are not the same.
Financial advice is often aimed at helping clients plan and manage certain elements of finances. This could include advice on investment products or retirement planning.
On the other hand, wealth management is a holistic service that supports clients across various aspects of their financial lives. It combines multiple financial services into one cohesive service.
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What is a wealth manager?
A wealth manager is a qualified financial expert. They implement and oversee a strategic plan to help clients reach their financial goals.
A wealth manager's role differs from that of a financial adviser. Unlike financial advisers, wealth managers provide a holistic approach, working with clients across multiple aspects of their financial life.
Wealth managers offer a wide range of services, such as:
- Investment management
- Financial planning services
- Tax services, including tax planning
- Wealth transfer
- Estate planning
- Risk management and insurance
Wealth managers tend to work with HNWIs. However, anyone with a complex financial situation could benefit from their services.
Why is wealth management in South Africa critical?
Economic volatility
South Africa has faced economic challenges, including fluctuating inflation and a volatile currency. These factors and others can directly impact portfolio performance and your overall financial planning strategy.
An essential way to protect against this is by building a diverse portfolio. This can help offset the overall risk profile.
Currency risk
The South African rand (ZAR) is particularly sensitive to fluctuations. This can cause the currency to lose value against other major currencies such as the US dollar, euro and Pound Sterling.
Offshore banking and investments can help protect against currency risk. It also provides exposure to international markets.
Political stability
South Africa has experienced periods of political instability in recent history. This can impact investor confidence and lead to market turbulence.
Wealth managers take a proactive approach and help clients to balance local and international investments.
The common components of wealth management in South Africa
While everyone's wealth management strategy will look different, some of the common components of wealth management include:
Investments
South Africa offers a range of investment options. For example, the Johannesburg Stock Exchange (JSE) is the largest stock exchange in Africa and an option for those looking to invest locally.
Wealth managers will also look to foreign markets to help clients build a more diverse portfolio. This can help offset local market volatility.
Retirement planning
Retirement planning leverages products such as provident funds and annuities to help ensure financial security when you stop working.
Tax planning
South Africa's tax system can be complex for HNWIs. Wealth management helps to structure assets to ensure tax efficiency. This may include products such as offshore investments, banking and trusts.
Estate and succession planning
Estate planning is crucial in South Africa to ensure you pass on your assets as intended. Creating a will, setting up trusts, and structuring assets in tax-efficient ways are essential aspects of wealth management.
Risk management
Risk management is an integral part of wealth preservation.
This means protecting your assets from political, currency and market risk. Wealth management also looks to manage risk through insurance products like life cover and income protection.
The benefits of wealth management in South Africa
Now that we know what wealth management is, let's look at its key benefits.
Expertise
Wealth managers bring a wealth of knowledge and experience to the table. They can offer insights into local and international financial markets, investment strategies and cross-border tax planning.
Ultimately, wealth managers can help people navigate areas of their financial lives that would otherwise be challenging.
Bespoke solutions
Wealth managers develop solutions tailored to the client's needs and goals.
Wealth protection
A wealth management strategy can help protect assets. Some of the methods typically used by wealth managers include building a diverse investment portfolio, using trusts, setting up offshore accounts, and applying risk management strategies.
Time-saving
Managing your wealth, especially as an HNWI, can be time-consuming and complex. So, with your finances looked after by a professional, you will have more time to focus on other areas of your personal and professional life.
Peace of mind
Working with a leading wealth management company in South Africa, like Holborn Assets, can provide peace of mind, knowing your assets are protected and wealth is in safe hands.
Wealth management in South Africa with Holborn Assets
Wealth management is a tailored service designed to oversee and support clients across all aspects of their financial lives.
Holborn Assets South Africa offers a range of market-leading wealth management solutions tailored to your needs and goals. Our financial professionals provide transparent, independent advice and an award-winning service to help you grow and protect your wealth.
Take control of your wealth with Holborn Assets South Africa. Book a free, no-obligation meeting today and learn how we can help you.
Frequently Asked Questions
Wealth management combines several financial services into one comprehensive package. It is designed to help individuals or families grow, preserve and protect their wealth.
