Want to give your business a boost? With the right partnerships, advisers can grow their businesses and client base by diversifying into new markets. We've identified three markets that present advisers growth opportunities: the affluent market, mass market and the informal market. Offering your services in one of these markets could be the key to future success.
Affluent markets present significant opportunities
Advisers in this market can help clients with their financial plans and goals, as well as recommend suitable products to achieve those goals.
This market has: Stable, regular incomes.
This market is: Discerning and questioning. A typical client will care about fees, appropriateness of advice and, increasingly, sustainability.
This market wants: Advice to help them manage their money and reach their goals, as well as preserve wealth for future generations. They value tailored advice, and flexible plans and products. This includes a range of insurance, investment and estate planning products.
Is there room for growth?: Although there is a lot of competition for clients in affluent markets, a Henley & Partners Africa Wealth report 2023 estimated that the African wealth management market will grow by 60% over the next 10 years, suggesting room for growth in both affluent and high-net-worth markets.
Look for a partner who: Offers a full range of wealth and insurance products and makes use of digital tools and solutions to limit the time spent on admin and increase the time available to get to know clients and advise them. For example, 1Life Vantage, 1Life’s digital solution for advisers in the affluent market, reduces the time spent on admin and keeps secure, online records. Onboarding can be done in minutes rather than the hours and days spent using traditional paper models (although these are available). A full range of insurance and investment products is available through Vantage, including the new 1Life Wills and Estate Plan that covers cash shortfalls in an estate and provides for a valid, signed and retrievable will.
Accreditation: Advisers operating in the affluent market need to be authorised Financial Service Providers (FSPs) or a representative of an authorised FSP, as well as accredited for the products advised on and sold from product providers.
Pragmatic and affordable solutions offer value to the mass market
This market, while working and earning mostly stable incomes, is feeling financial stress with higher living costs and interest rates.
This market has: Stable, lower incomes.
This market is: Aspirational, they want to save for financial goals that will better their and their children’s lives. But money is tight.
This market wants: Insulation from financial shocks (including life insurance and funeral cover), affordable savings and investment products, as well as financial education. Clients want to learn more about how to manage their budgets and debts, as well as how to improve their financial situation.
Is there room for growth?: Aspirational markets always present opportunities and these markets have not always been serviced by the traditional investment and insurance businesses. The numbers in this market are high. For example, Consultancy Eighty20 says there are around 11.9 million South Africans earning between R3 000 and R8 000 a month.
Look for a partner who: Offers easy to understand products that cater for families. For example, 1Life offers a range of insurance and funeral cover products that can be sold using digital or paper-based platforms. These include funeral plans that cover up to 16 members and offer additional benefits such as a repatriation service. Digital solutions save time that the adviser can use to help clients with their budgets and debt management. They can also help clients learn more about how to manage their money well, and/or refer clients to Truth About Money where they can apply for free financial education courses.
Accreditation: Advisers need to be authorised Financial Service Providers (FSPs) or a representative of an authorised FSP, as well as accredited for the products advised on and sold from product providers.
The informal market is large and underserviced
The informal market isn't cash flush, but it is cash smart, and the numbers and needs are significant.
This market has: Irregular and unstable incomes.
This market is: Rands and cents smart. Because money is scarce and incomes irregular, they are savvy spenders. They are also entrepreneurial. The 2023 Mastercard Driving Financial Inclusion in South Africa’s Informal Economy study estimated that there are 3.3 million micro and informal businesses in the country.
This market wants: Affordable, easy to buy and use financial solutions to ease financial shocks, for example funeral cover.
Is there room for growth?: Yes, this market is large, and actively looking for ways to improve their finances.
Look for a partner who: Offers easy to understand products that are easy and quick to distribute. For example, 1Life offers 1Life Prepaid Funeral Cover. Clients can buy a prepaid funeral voucher at distributors with cover options of R5 000, R10 000 or R15 000. Vouchers are valid for 30 days. Clients register and activate cover on a USSD platform (smartphones are not required). Advisers can earn a distribution fee that is paid once the voucher is activated. Policy and client servicing, including claims processing, is done by 1Life, freeing up the adviser’s time.
Accreditation: An FSP licence is not required for prepaid funeral cover, although advisers may need product provider accreditations.
Interested in growing your business and diversifying into other markets?
Talk to your 1Life broker consultant who will guide you through the digital tools and platforms available as well as the products and support services.