South Africa’s wealth management market is well-positioned for success. It is a potential hub for other African wealth management markets, having one of the biggest stock exchanges in the world and a well-developed wealth management, fund management, and banking system.
Big Banks are pushed out
Wealth management companies in South Africa are experiencing a transformative shift. The boutique firms take a significant market share with traditional banking giants (e.g., Investec, RMB, and Nedbank). The large banks dominated the scene for years.
Later, boutique firms emerged, offering personalized and customized services. With innovative strategies and client-centric approaches, boutique wealth management companies are reshaping the whole industry now. Wealth management companies play a crucial role in navigating capital gains tax, estate duty, and other taxes.
The 12th edition of the Intellidex Top Private Banks and Wealth Managers survey ranked the following wealth managers and private bankers for 2023: Top wealth managers (large institutions): PSG Wealth, Nedbank Private Wealth, and RMB Private Bank. Top wealth managers (boutiques): Centric Wealth Advisory, Brenthurst Wealth Management and BDO Wealth Advisers.
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PSG Wealth has won the Top Wealth Manager (large institutions) award every year since 2019. This year, PSG also won three of the six archetype awards in the wealth management category: lump-sum investor, executive, and retiree. Centric Wealth Advisory won the Top Wealth Manager award for boutiques for the second consecutive year in 2023.
The Role of Family Offices
Above all, family offices are a fast-growing wealth management segment. They traditionally provide a more customized offering than wealth managers and private banks. Their services include family education management, household staff management, intergenerational transfer and legal and tax services, philanthropy coordination, and property management, in addition to the usual investment services.
Typically, family offices are exclusively for family members and family-related foundations, trusts, and venture capital companies. Single-family offices are generally viable only for individuals with investable assets of over USD 50 million.
South Africa tops the list of the Top 10 wealthiest countries in Africa in terms of resident high-net-worth individuals by some margin. There are 37,800 millionaires in South Africa (USD 1 million+), 98 centi-millionaires (USD 100 million+), and 5 billionaires (USD 1 billion+).
For comparison, second-place Egypt has 16,100 millionaires, 54 centi-millionaires, and 8 billionaires. Johannesburg is the most affluent city in Africa. The Sandton suburbs of Hyde Park, Inanda, and Sandhurst in particular are home to large numbers of high-net-worth individuals.
