Independent financial advice: The power of choice in a shifting South African economy

South Africa’s financial services sector is among the most advanced on the continent. In 2024, the country led with an insurance penetration rate of 11.54%, significantly surpassing the continental average of 1.47% in 2022 and drawing closer to the global benchmark of 5.6%. This demonstrates the depth and maturity of South Africa’s insurance landscape, a market that sets the pace for innovation and regulatory development across the region.

Insurers and brokers face pressure to grow, prompting many to acquire stakes in independent brokerages for customer access rather than innovation. As a result, financial advice is often driven by profit targets, not client needs, and consumers end up with products that serve the insurance industry rather than their personal goals.

In this environment, South Africans pay not just in premiums but also in missed opportunities to build wealth, protect their families, and plan for the future.

Without a shift toward financial literacy, transparency, and independent advice, this cycle will continue making independent advice not just helpful, but transformative.

Why independence matters, now more than ever

Unlike tied agents who represent a single provider, independent financial advisers (IFAs) have the freedom to recommend solutions tailored to your needs, especially within advisory houses offering access to many products and providers.

Research by the Bureau of Market Research and Momentum found households with professional advice have portfolios 9.5 times larger on average. For some, this is the difference between renting for life and owning a paid-off home, highlighting the impact of financial guidance.

For businesses: beyond compliance, toward care

HR and employee benefits professionals must deliver more with less. Independent brokers balance cost and care, navigate regulatory shifts like NHI and medical scheme reform, build wellness strategies for retention, and offer guidance to boost engagement. Their independence unlocks innovative solutions across the market.

Ultimately, it’s about fostering cultures of care that support both people and performance.

For individuals: planning with purpose

South Africans face rising costs, shrinking safety nets, and growing financial complexity. Independent advisers provide unbiased recommendations, holistic planning, support through life transitions, and peace of mind that your money works for you.

For entrepreneurs: protecting the vision

Africa’s youth face a future of potential: by 2035, the continent is expected to have the world’s largest workforce. For them, financial literacy is crucial for sustaining businesses, making informed decisions, and achieving long-term growth.

When young entrepreneurs master cash flow, asset protection, and planning, they don’t just build wealth – they build resilience. This resilience fuels job creation, economic stability, and inclusive prosperity.

Independent advice helps founders

• Separate personal and business finances
• Plan for liquidity events and succession
• Structure ownership and protect assets
• Build long-term wealth while scaling their ventures

Entrepreneurs are builders,” adds Pillay. “But without the right financial strategy, even the best ideas can falter. Independent advice helps turn vision into legacy.”

For advisers: reclaiming purpose and professionalism

Choosing to be an independent adviser means serving clients without compromise, building trust, and creating value beyond commissions. While tied agents often earn more selling specific products, independents prioritise clients’ interests. Remaining independent is a bold, client-first choice in a market where providers tie advisers to their offers.

At ASI, we support advisers with strategic partnerships, expert networks, and platforms that empower them to focus on delivering advice that transforms lives.

The ASI Podcast

ASI is launching a podcast with Nicolette Mashile, South Africa’s top financial educator. It features ASI experts and independent advisers discussing medical schemes, employee benefits, entrepreneurship, and wealth creation. The podcast helps HR leaders, business owners, and South Africans make smarter money moves with real talk and expert tips.

The trade-offs

Independence comes with trade-offs. Advisers and clients may face higher costs and more compliance. But these challenges are balanced by the freedom to choose products in the client’s best interests. For many, this freedom outweighs the constraints of tied models.

Independent advice empowers individuals to control their financial futures. It helps businesses build caring cultures, individuals plan confidently, and entrepreneurs protect what they build.