Advisor Challenges and Opportunities

South Africa’s financial advice industry continues to grow, but advisers face mounting complexity. In this Mind Shift conversation, COVER’s Tony speaks with Daniel van Andel, Head of Platform and Advisor Proposition at Allan Gray, about insights from their latest Adviser Barometer report, which captures the shifting dynamics of the sector.

Van Andel explains that advisers’ challenges vary widely by practice size. Sole proprietors and small firms often grapple with succession planning, compliance, and keeping costs under control, while larger firms focus on scaling effectively, managing staff, and embedding technology. Globalisation also adds complexity, as clients and beneficiaries increasingly span multiple jurisdictions.

Revenue models remain dominated by ongoing asset-based fees, typically 0.5% to 1% of assets under management. While 90% of advisers still rely on this approach, Allan Gray’s research shows fees trending slightly downward over time. Alternatives such as hourly consultation, upfront planning fees, and fixed retainers are emerging but remain a minority practice, especially compared with the UK market.

On technology, advisers are looking for solutions that ease compliance and automate repetitive tasks. Larger firms have the scale to invest, while smaller firms risk overextending budgets. AI is viewed with interest but not fear—advisers see its efficiency potential but are cautious about premature adoption.

Finally, Van Andel highlights behavioural coaching as an area of growing importance. He stresses that advisers’ true value lies in their ability to guide client decisions and behaviour, not just in product selection or reporting. For him, clarity on the core value proposition, advice itself, should drive how firms structure, outsource, and invest in technology.

The discussion positions advisers not just as intermediaries, but as trusted partners whose future success depends on adaptability, pragmatism, and a renewed focus on delivering meaningful client outcomes.

Key points

• Challenges differ by firm size: small firms (succession, compliance, cost); larger firms (scaling, staff, tech).

• Revenue models: asset-based fees still dominant, but diversification slowly emerging (hourly, upfront, fixed).

• Technology focus: compliance relief, automation of manual tasks, and pragmatic adoption over “big bang” systems.

• AI: potential efficiency gains, but most advisers prefer to wait for clear, proven use cases.

• Behavioural coaching: increasingly seen as the core value advisers bring to clients.

• Industry health: adviser numbers and practices are still growing in South Africa, countering fears of robo-advice displacement.