Professional financial advice offers substantial benefits, including significantly higher household wealth and an improved sense of financial well-being. Yet, many South Africans continue to rely on their own knowledge or informal sources, often because they do not understand what an adviser does or believe that financial advice is only for the wealthy.
These are among the findings contained in Momentum’s 2025 Financial Advice Research Report, produced in partnership with UNISA’s Bureau of Market Research.
The research found a clear link between using a certified or professional financial adviser and household wealth. On average, the investments of households who have an adviser are 9.5 times larger than those without. This wealth difference was consistent across the three categories of financial assets (deposits, retirement savings and long-term insurance, and investments), as well as non-financial assets (residential buildings, durable goods, and other tangible assets).
Yet, many South African households do not use professional financial advisers. Instead, 77% rely on their own knowledge, skills, or experience for financial guidance, while 12% turn to family, friends, or colleagues for advice.
Only 9% of households (about 1.8 million out of 20 million) make use of professional or certified financial advisers. Among those who do seek professional advice, 70% earn more than R15 000 a month, while only 39% of households earning more than R40 000 a month use a professional adviser.
The research identified the barriers that are preventing the uptake of professional financial advice. These are:
- Lack of awareness: Many people do not understand what financial advisers do or how they can assist.
- Financial constraints: Households often feel they lack the disposable income to afford professional advice.
- Affordability concerns: There is a widespread perception that financial advice is costly and out of reach for the average household.
- Difficulty finding advisers: Some individuals struggle to locate qualified financial advisers.
- Misconceptions about who needs advice: Many believe financial advice is only for the wealthy, excluding lower- and middle-income households.
- Dissatisfaction with current products: Some feel that existing financial solutions do not align with their specific needs.
Financial advice in times of uncertainty
People are more likely to seek financial advice when facing uncertainty or challenging circumstances. Whether it’s a major life event, such as buying a home or planning for retirement, or broader economic shifts, these moments of turbulence often highlight the need for expert guidance.
However, the research found there is a psychological barrier: individuals may hesitate to seek advice if they fear it will make them appear incompetent or unprepared.
The report identified several specific triggers that drive South Africans to seek financial advice. These triggers include:
- Economic challenges: Factors such as rising inflation or unemployment can destabilise personal finances, prompting individuals to seek advice on how to manage or mitigate these impacts.
- Regulatory and structural changes: New laws, such as the introduction of the two-pot retirement system, often require expert interpretation to understand their effects on personal finances.
- Personal financial challenges: Issues such as mounting debt, difficulty budgeting, or saving for specific goals are common reasons for seeking professional help.
- Socio-economic dynamics: Broader societal changes, such as income inequality or demographic shifts, can alter the financial landscape, making advice essential for adapting to new realities.
- Technological and educational advancements: The rise of new financial tools and platforms can be both empowering and overwhelming. Although these advancements offer more options, they can also complicate decision-making, leading people to seek guidance on how to use them effectively.
Interestingly, the research found that most triggers for seeking financial advice are negative, with few positive events prompting the same action. This suggests a reactive approach, where advice is often sought only when financial situations worsen.
Expectations from financial advice
South Africans have specific expectations when seeking financial advice. These expectations centre on three key principles:
- Practicality, which indicates that South Africans want financial advice that is straightforward and easy to understand. The advice should be applicable to their unique financial circumstances, helping them to navigate complex decisions with clarity.
- Transparency: Clients expect advisers to be open about the advice process, including any potential risks or costs, fostering trust in the relationship.
- Tangible results: The advice must lead to measurable financial improvements, such as increased savings, better investment returns, or improved financial security.
According to the research, clients view financial advisers as effective when advisers:
- strive understand their context and needs;
- conduct an analysis their circumstances and needs;
- apply objective criteria when providing advice;
- are open and honest, driven by integrity; and
- are knowledgeable, demonstrating a good understanding of solutions and products.
Channels for financial advice
Face-to-face advice remains the most popular method for receiving financial guidance in South Africa. According to the report, 60% of households currently use this channel, and an additional 36% have used it in the past.
This preference likely stems from the personal connection and trust that direct, in-person interactions foster. Face-to-face meetings allow advisers to understand clients’ needs better through non-verbal cues and provide tailored, empathetic guidance. The ability to build a relationship and address complex financial topics in real-time makes this channel highly effective for many.
Although face-to-face advice dominates, virtual channels are becoming increasingly appealing. Nearly 30% of households indicated they would consider receiving advice through virtual platforms such as Teams, Zoom, and other online meeting tools.
No doubt, this growing interest reflects a broader shift towards digital communication, accelerated by the pandemic. Virtual advice offers convenience, enabling clients to connect with advisers from anywhere, saving time and eliminating the need for travel.
Digital innovation is also introducing new ways to access financial advice, particularly through robo-advice and chatbots. More than 15% of households are open to these options, the research found.
Robo-advice uses algorithms to provide automated financial recommendations, while chatbots offer instant, AI-driven responses to financial queries. These tools appeal to tech-savvy individuals seeking quick, cost-effective solutions. However, they may lack the personalisation and emotional intelligence that human advisers provide, making them better suited for straightforward financial tasks rather than complex, nuanced situations.
Digital banking leads the way
Digital banking is by far the most popular digital financial service in South Africa, according to the report. Households rely on it not only for everyday transactions – such as transferring money or paying bills – but also for receiving financial advice through online tools and platforms. This widespread adoption reflects a high level of comfort with digital banking, which has become a staple for many.
Beyond banking, digital channels are also commonly used for managing savings accounts and investment portfolios and handling medical insurance and related services.
While digital banking, saving, and investing are well established, there is a growing appetite for expanding digital services to more complex financial products. According to the report, many households are interested in receiving financial advice through digital channels for wellness and rewards programmes, long-term insurance, and wills and trusts.
This interest signals a shift toward a more tech-driven approach to financial planning. As people become more comfortable with digital tools, they are open to using them for guidance on products that traditionally required in-person consultations.
However, it’s important to recognise that receiving financial advice digitally is not the same as purchasing financial products online. Although many are eager to seek guidance through digital platforms, the actual purchase of products – particularly complex ones such as insurance or estate planning – may still involve traditional methods, such as consulting a human adviser.
The report highlights this distinction, noting that:
- Digital advice is about accessing information and recommendations online.
- Digital purchase involves completing transactions, such as buying insurance or investment products, entirely through digital channels.
For simpler products, such as opening a savings account, digital purchases are more common. But for more intricate financial decisions, many still value the reassurance of speaking with an expert before committing.
