Hannes Van Den Berg, CEO at Momentum Advice

This week’s headlines have once again been dominated by economic pressure points: households navigating persistent inflation, renewed debate around retirement withdrawals, and growing concern about whether small businesses can absorb rising costs while still creating jobs.

When economic uncertainty trends, financial anxiety follows. And while policy adjustments and regulatory reforms matter, they do not, on their own, change behaviour or secure financial outcomes.

Government policy may shape the environment, but personal advice enables the action. Rather than seeing professional financial advice as a luxury service, we need to consider it as a form of national infrastructure - the essential delivery mechanism that connects the macro-economy to the micro-realities of South African households.

Translating policy into reality

There is one budget for the country, but there are millions of different individual financial realities. While a policy change might be uniform, its impact is hyper-individualised. For a mid-career professional, a change in retirement legislation is a long-term planning variable; for an SMME owner, it might be a liquidity consideration.

Financial literacy is often touted as the solution to this complexity. However, there is an important gap that literacy alone cannot bridge. If financial literacy is about having a good understanding of financial concepts, advice is knowing what to do with it. Understanding that tax laws have changed is the foundation while determining exactly how to restructure a portfolio to remain compliant and efficient is the engine of progress. An adviser acts as the translator, turning abstract legislation into a concrete, actionable roadmap.

Well, advised individuals and SMMEs are economic stabilisers

The importance of this infrastructure extends beyond individual wealth. When an individual is well-advised, they move from a state of financial vulnerability to one of resilience. Momentum’s research reveals that households that who make use of professional financial advisers become wealthier than those that don’t use an adviser.

By aligning their personal portfolios with current tax incentives and retirement reforms, advised individuals are better positioned to absorb inflationary shocks without depleting their long-term savings. This personal stability acts as a micro-level buffer; when households are financially secure, they reduce the collective burden on social safety nets and contribute to a more predictable, consumption-led growth within the local economy.

This also applies to SMMEs. Regarded as the backbone of the South African workforce, they are often the most vulnerable to economic shocks. When a small business owner receives sound financial advice, the benefits ripple through the entire economy.

Properly advised businesses are better equipped to:

• Absorb shocks: Navigating interest rate cycles and inflationary pressures through proactive risk management.
• Protect livelihoods: Ensuring the business remains a going concern, thereby safeguarding the jobs of their employees.
• Optimise Incentives: Correctly using government grants or tax incentives that might otherwise go unclaimed due to administrative complexity.

When we strengthen the financial resilience of an SMME through professional partnership, we aren't just helping a business; we are deploying an economic stabiliser that protects the broader national workforce.

Closing the advice gap

As our financial landscape becomes more sophisticated - marked by increased volatility and frequent regulatory updates - the advice gap threatens to leave many South Africans behind. While insurance and savings tools helped absorb part of the financial impact of recent global disruptions, the gap between policy intent and consumer action is widening.

As weather events and other disruptions increase, the cost of inaction rises, adding to the financial strain many households are already under. We therefore need to move the conversation away from what the government has done to us and toward what we can do for ourselves.

Professional advice transforms individuals and SMME owners from passive observers of the National Budget into active participants in their own financial security. Advice is the critical utility that makes policy work.

Proactive partnership for national growth

Both advisers and clients play a proactive role in reducing systemic risk. By treating financial advice as an essential, accessible, and foundational utility, we create a more robust economy. When individual financial decisions improve at the household and business level, the collective result is a more stable, resilient nation.

Ultimately, the true value of national policy is only realised when it is delivered into the hands of the people it was meant to serve. Professional advice is the bridge that makes that delivery possible.

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