The mindset of ‘making your money work for you and not just working for your money’ is difficult to embrace for most people in South Africa living from one paycheck to the next.
According to the Allianz Global Wealth Report 2019, approximately 10% of SA’s population is classified as middle class and earns more than R10 225 per month – a figure considered barely feasible to provide for one’s needs in the present, let alone setting aside for the future. The other 90% of the population is in dire need of good financial advice and cannot access it because they cannot afford it or don’t have enough to invest.
The financial advice they do receive isn’t holistic and is directed towards savings, life assurance or funeral cover needs and less so towards debt management and budgeting. A reason for this is that financial advisers do not make money from budgeting or debt management.
At the 2018 Morningstar Investment Conference, Alexander Forbes’ head of research, Anne CabotAlletzhauser, said that “up to now, the role of financial planning had been centred on the idea that if you stick to a financial plan and achieve it, everything else will fall into place, but this is not so”. The role of the financial adviser of the future will not be about picking the best investments for you, but rather helping you improve your financial capability, she said.
There is undoubtedly a need to get good, holistic financial advice and education to the masses and fintech could provide some of what is required.
Has fintech already improved access to financial advice?
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