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Think Business holds the inaugural Private Banking and Wealth Management Forum.

The Private Banking  and  Wealth  Management Forum is  a timely  event  that  seeks  to  officially  initiate  the  conversation  around  wealth  management, the steady  year on year increase in  number  of  High Net Worth Individuals (HNWIs)  and  its  impact  on a  growing  wealth  management  industry.

Over  the  past decade, African  economies  have  experienced  exponential  economic  growth  not  only  leading  to  the  burgeoning  of  the  middle class  demographic  in  Africa, but  also  spurring  a  silent  and  steady  growth  of  HNWIs. By  definition, high  net worth  individuals  are  classified  as  persons  with  at least  USD 100 million  dollars  in  net worth  and  in  2015,  the  number  of  HNWIs  in  Africa  stood  at  145,000  with a  combined  wealth  portfolio  of  USD$ 1.392  trillion  dollars.

The  HNWIs  are  considered  a  sophisticated  demographic  class  that  is  quite  particular  in  their  financial  needs, therefore  this  has  spurred  immense  interest  in  the  private  banking  and  wealth  management  services  making  it a much  sought  after  financial  service  in  Africa. In  the  soon  to be launched  Think Business  Private Banking and Wealth Management Report, that  comprehensively  details  with  articulate  precision  the  emerging  trends  of  Africa’s  HNWIs,  market  trends, market  size, and  the  regional    distribution  of  these  HNWIs  assets.

The  report  shows  that  Africa’s  HNWIs  elicit  varying  prioritization  on  matters  wealth. 47.9  percent  of  Africa’s  HNWIs  prefer  to  work  with  a single  management  firm,  while  15.2  percent  prefer  to  work  with  several  multiple  firms.  In  addition  36.6  percent  seek  professional  advice  on  matters  regarding  their  wealth  while  30  percent  do  not  feel  the  need  to. In addition, 87  percent  of  the  individuals  are  optimistic  and  maintain confidence  in  their  ability  to  generate  wealth  in  the  future, 34  percent  are  focused  on  growth  while  33  percent  are  prioritized  on  preservation  of  the  wealth.

The  HNWI  have  diversified  their  business  interests into  a  variety  of  asset  classes. 26.5 percent  of  African  HNWI  have  their  assets  in  cash  and  cash  equivalent, 20  percent  in  real  estate, 19  percent  in  bonds  and  equity  stocks  and  18  percent  in  fixed income  securities.  Alternatives investments account for 17 percent of Africa’s HNWIs.

 

With an  estimated  34  percent  of  HNWI  focused  on  growth  of  assets  and  increasing  their  portfolios,  this  directly  impacts  the  choice  of  wealth  advisors  since  many  HNWIs  would  prefer  advisors  with  global  outreach  with  the  aim  of  taking  their businesses  global. North America, accounts  for  22  percent  of  the  group’s  business  interest  with  Africa  at  21  percent.  Other  major  regions  where  the  African  HNWI  reserves  interests  in  Middle-East, Asia Pacific, and Western Europe  counting  for  17 percent, 14  percent,  and  10  percent  respectively.

Among  the  speakers  at  the  Wealth Management Forum  to  be  held  at  Radisson Blu  is  Atiq Anjarwalla  Senior  Partner  at  Anjarwalla  and  Khanna  who  taps  into  over  25  years  experience  in  legal  practice  discusses  matters  inheritance  from  a  legal  perspective.  In  an  past  interview  with  Think  Business  Anjarwalla  elucidates  that  inheritance  matters  are  a major  source  of  family  strife,  challenges  that  if  left  unresolved  pose  significant  risk  to  the  wealth  with  attrition  being  the  imminent  consequence.

“At  Anjarwalla  and  Khanna  we  have  taken  the  initiative  to  advice  businessmen  and  emphasize  on  the  importance  of  preparing  a  succession  plan.  The  ultimate  aim  should  be  preserve  the  business  since  it  is  the  main  source  of  the  family’s  livelihood  and  making  them  understand  that  having  in place  a  succession  plan  ensures  longevity  of  the  business  beyond  them,” says Mr. Anjarwalla.

Present  at  the  Forum  will  be  Nairobi Securities Exchange CEO, Geoffrey Odundo who  discusses  enriching  wealth  management  in  Africa  through  the  Capital Markets. In a past  interview  with  Think Business,  Mr. Odundo, mentions  that  there  are  plenty  of  incentives  that  continue  to  endear  HNWIs  to  the  NSE ,  the  main  factor  being  the  ability  to  continue  creating  wealth  in  proportion  to  investment.

“The securities  market  has  largely  been an  avenue for  wealth  creation  because  of  a  variety of  factors. Firstly, there  is ease  of  entry  into  the  market  and  it  is  devoid  of unnecessary  sophistication  from  the  basic  requirements to  the  entry  level. Historically  an  analysis  of the stocks  that  have  come  through  IPOs,  8  out  of 10 entities  have  had  a capital  appreciation  on  their  secondary  listing,  with  price  value  at  IPO  price  scaling  by  over  300 percent in  a  short  period  of time. Therefore  over  time shares  provide  an  opportunity for  capital  appreciation  through price  growth  which  enjoys  tax benefits, bonuses  and  dividends. The  market  provides that  platform  to  ably  de-invest  wealth  across various  sectors  which  enables  an  investor  build  a  portfolio across  the  economic  sectors,  which  ensures  the  risk  is  diversified  and  enjoy  the  benefits  of  different  sectoral  strengths  as  opposed to just  a  single  line  of  investment,” states Mr. Odundo.

Kenya  is  the  4th  richest  country  in  Africa  in  terms  of  individual  HNWIs  only  trailing  South Africa, Nigeria  and  Egypt. The  country’s  HNWIs  volumes  increased  by  60  percent  from  5300  in  2015  to  8500  individuals  in  2016  and  the  number  is  expected  to  soar  to  15300  by  2025.
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