June 2024 Edition

Navigating new horizons in wealth management

Diving into the June 2024 edition of COVER Magazine, we are in a period of significant transformation and opportunity within the insurance and financial services sectors. The articles presented this month highlight the evolving landscape of wealth management, the increasing demands of high-net-worth individuals (HNWIs), and the critical role of innovative solutions in addressing emerging challenges. The high-net-worth sector in South Africa is under strain, grappling with rising crime rates, economic pressures, and a notable emigration trend.

The question that looms is whether this sector is genuinely shrinking or if we are merely adjusting our benchmarks. The African Wealth Report 2024 by Henley & Partners indicates a 20% decline in South Africa’s millionaire population over the past decade, yet it also projects a 65% growth in Africa’s millionaire population over the next ten years. This dual narrative underscore the complexities and potential within this market.

In response to these dynamics, financial advisers and investment platforms must differentiate their offerings to meet the unique needs of HNWIs. The shift towards a more inclusive approach to wealth accumulation, including non-traditional investments and entrepreneurial ventures, is crucial. This issue of COVER delves into how investment platforms can customise solutions, leverage technology, and provide global mobility solutions to help clients navigate this complex environment. 

Our feature on family offices offers insights into securing generational wealth. The five essential ways family offices can support ultra-high-net-worth (UHNW) families include centralising family wealth, managing the transfer of wealth across generations, handling complex family affairs, ensuring discretion and privacy, and addressing the softer issues such as family constitutions and philanthropic management. These entities are becoming increasingly vital in offering comprehensive support to families with intricate financial and estate management needs. 

Additionally, we explore the insurance needs of HNWIs, emphasising the importance of personalised solutions that cater to their distinctive lifestyles and asset collections, where there is significant opportunity for insurers who can offer differentiated and bespoke products. The role of specialist insurance brokers is highlighted, particularly in navigating the unique challenges posed by the South African market, such as load shedding and the demand for sustainable and technologically advanced properties. 

Furthermore, the upcoming Two-Pot Retirement System represents a landmark shift in retirement savings in South Africa. Financial advisers are urged to educate themselves and their clients about the system’s tax implications and the importance of avoiding premature withdrawals. This new system presents both challenges and opportunities, and advisers must be prepared to guide their clients through these changes effectively. 

As always, we aim to provide valuable insights and practical advice to help professionals navigate these new horizons. From innovative insurance solutions to comprehensive wealth management strategies, our goal is to equip you with the knowledge and tools needed to excel in this dynamic environment. 

Enjoy the read, and may it inspire you to embrace the opportunities and challenges that lie ahead. 

Tony van Niekerk – Editor-in-Chief, COVER Magazine 

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Tony van Niekerk, Editor-in-chief, COVER

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