Opportunity beckons for Africa’s emerging wealth market

09 November 2018 Deon de Klerk, Head of Wealth: Africa Regions for Standard Bank

While there is a growing international movement towards a shared future, there is still a long road ahead. Many headwinds are holding back the ability of nations to grow and create financial stability and wealth, not least of which are ongoing geopolitical strife and consequent policy uncertainty.

Emerging markets – in particular, in Africa – need to be even more vigilant in this environment to ensure they protect their wealth for future generations.

One of the major challenges in Africa is providing solutions for the emerging and aspirant markets. These segments, although poised to play an increasingly important role in Africa in the decade ahead, feel left out. Wealth is for everyone and more adequate solutions are needed to connect with these markets.

In addition to this is the growing need to manage wealth across far more segments and channels than before. Innovative banking and non-banking financial services solutions for corporates, for example, are needed as they begin to see growth accelerate across the continent. There is a strong opportunity to improve the wealth management strategies of more countries, companies and citizens across Africa if prudent strategies are adopted early.

Impeding this, however, is the need to improve levels of client satisfaction across the wealth management industry across Africa.

The major contributors to improving satisfaction levels in this market include the need for transparency in fees, more tailored and personalised offerings, executional excellence and multi-channel access provided by engaged and trusted advisors.

Broader service offerings, like more alternative investment choices, will be crucial. The move to offer hybrid advice (access to digital tools which enable self-investing while at the same time providing access to a human when required) also needs to be taken seriously – especially as more young African professionals, self-made and otherwise, emerge.

EY's recent Wealth Management Outlook 2018 report highlights that holistic wealth management will emerge as a new kind of digitalized business model. Holistic wealth managers are expected to gain a market share of 30% by 2025 and wealth managers with traditional business models will struggle to keep pace as a result.

In this cauldron of change, higher expectations are being placed on wealth managers to provide tailored, end-to-end support. This goes well beyond asset allocation and performance to long- and short-term insurance solutions matched to geographical area, philanthropy and preservation.

Conventional asset classes no longer cut it and more alternative investments are being sought, including private equity, passion investing and direct offshore real estate. Core corporate and individual solutions need to form part of the broader wealth proposition, including a growing need for commercial solutions like insurance and employee benefit innovations.

Standard Bank Wealth is well positioned to drive the vast array of wealth and financial management solutions needed to make a difference in the lives of individuals from all markets and businesses across the continent.

We have taken heed of the demands of the growing African markets and of corporates in need of both banking and non-banking solutions and offer an integrated suite of end-to-end financial services and banking solutions across the continent. Our offices and experts on the ground across Africa help maximise opportunities within a holistic over-arching financial plan, elevating to inter-generational plans where needed. This network ensures seamless solutions are found for on- and offshore financial planning needs. Life insurance, investment and health management solutions to individual and corporate clients is also provided in 16 countries across Africa, along with banking services.

There is a growing importance to protect wealth in Africa due to the volatile nature of the global and local markets. This is where our insurance and financial consultancy services and products can really come to the fore, making sure individuals and their personal assets, however big or small, are protected through car, home and life insurance as well as bespoke advice on fiduciary planning, trusts and wills.

Standard Bank Group is the largest African banking group by assets and our strategy is to be an African focused, client-centred, digitally-enabled universal financial services organisation, which drives Africa’s growth and protects what matters most to our clients – while creating real value for all our stakeholders. We can only do this by placing our clients at the centre of everything we do.

From a wealth perspective this means ensuring that they have accessibility, multi-channel access and customised service. When combined with personalised offerings, trusted and knowledgeable advisers and fair, transparent and appropriate fees we will ensure we will have a sustainable, competitive advantage in the exciting, fast-paced African market.

The development of the wealth industry in Africa has the potential to greatly improve the lives of citizens and their families, and of the companies they work for on this beautiful continent we call home. And the journey is far from over. Standard Bank Wealth’s universal financial services offering and end-to-end solutions aimed at managing, growing, preserving and insuring this wealth, however, place us firmly on course to ensure more people, from more markets, can benefit from a shared, more secure future.

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