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Financial Planning
08 minutes

Navigating challenges and opportunities in South Africa’s advice landscape

South Africa’s advice industry faces regulatory, client, and revenue pressures, but also new opportunities to redefine value, scale, and growth.
Written by
Daniel van Andel
Published on
September 18, 2025
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South Africa’s financial advice industry stands at a crossroads. Advisors are grappling with regulatory complexity, changing client expectations, and evolving revenue models, while simultaneously navigating unprecedented opportunities to redefine their value proposition.

This dynamic tension is captured in Allan Gray’s latest Advisor Barometer Report, unpacked in a recent conversation with Daniel van Andel, head of platform and advisor proposition at Allan Gray.

Diverse challenges across the spectrum - Van Andel is quick to point out that no two advisory practices are the same, and neither are their challenges. “It’s probably not a one-size-fits-all,” he notes. Sole proprietors are most often preoccupied with succession planning and compliance burdens. As advisors age, the question of who will continue serving their clients looms large, compounded by escalating regulatory obligations that carry significant cost implications.

Larger, more established firms, by contrast, tend to have these basics in place. Their challenges centre around scaling sustainably, adopting technology, recruiting and retaining skilled staff, and managing increasingly complex client needs, particularly in cross-border scenarios. “Clients and their beneficiaries are more frequently based abroad,” Van Andel explains. “That adds layers of complexity in understanding different jurisdictions and vehicles.”

Revenue models under pressure - The report highlights a steady evolution in how South African advisors charge for their services. Over the past two decades, the industry has largely transitioned from commission-driven products to ongoing asset-based fees. Today, more than 90% of advisors rely on this model, typically charging between 0.5% and 1% of assets under advice.

Interestingly, the average fee level has edged downward, now sitting at roughly 0.56%. “There’s room to reassess that,” says Van Andel. “With rising compliance costs, some advisors might need to evaluate whether current levels still reflect the value they deliver.”

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"Customising around old ways of working can be a rabbit hole. Better to adapt processes to the technology. "

Daniel van Andel
head of platform and advisor proposition, Allan Gray

Alternative fee structures, hourly rates, upfront planning fees, or fixed retainers, are emerging, though adoption remains limited. Hourly fees range from R750 to R3,000, while comprehensive upfront plans can command between R5,000 and R50,000. “We see these models in maybe 10 to 20% of practices,” Van Andel observes, far below uptake in markets like the UK.

Consolidation and practice growth - Despite predictions that robo-advice might eclipse human advisors, South Africa’s advice industry continues to grow, both in practitioner numbers and assets under management. Yet the structure of the market is shifting. One-person practices are gradually declining as advisors either merge into mid-sized independent firms or join national networks.

“These networks are accounting for a growing share of new business,” Van Andel says. “They represent about 25% of intermediated assets but 35% of net flows, a sign they’re expanding faster than the market.” Notably, many of these networks have been built by advisors exiting tied agency models, attracted by the greater autonomy of quasi-independent frameworks.

Technology: Promise and pragmatism - Technology adoption remains a double-edged sword. While larger firms can invest in bespoke systems that drive efficiency across multiple advisors, smaller and mid-sized practices face a tougher trade-off between cost and benefit.

Allan Gray’s research found that two-thirds of advisors want technology primarily to ease compliance and regulatory burdens, followed by automation of repetitive tasks. Client reporting and financial planning tools rank lower on the wish list. “Historically, the emphasis was the other way around,” Van Andel notes. “Now it’s about running the business more efficiently.”

AI is a hot topic, but uptake is tentative. Beyond virtual meeting note-takers, few advisors have integrated AI meaningfully into their workflows. Van Andel advises caution: “Being an early adopter carries cost and risk. As use cases become clearer, late adopters may achieve better value.”

He also highlights the need to rethink processes rather than mould technology around existing inefficiencies. “Customising around old ways of working can be a rabbit hole,” he warns. “Better to adapt processes to the technology.”

The rise of behavioural coaching - A notable trend is the growing emphasis on behavioural finance, guiding clients not just on investments, but on how emotions and biases influence financial decisions. South Africa lags more mature markets in integrating behavioural coaching, but momentum is building.

“Advisors must identify their true value-add,” Van Andel says. “For most, that’s advice, not investment management or technology. Once you’re clear on that, you can decide which functions to outsource and which to double down on.”

Looking ahead - The future of financial advice in South Africa will likely hinge on balance, between tradition and innovation, personal service and scalable systems, local expertise and global complexity. As regulatory demands intensify and client expectations rise, advisors who can harness technology pragmatically while reinforcing their human value will be best placed to thrive.

“All advisors need to ask: what’s core to my proposition?” Van Andel concludes. “Once that’s clear, you can shape your business model, and your technology choices, around delivering it.”

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