Vera Nagtegaal | CEO | VouchSA | mail me |
For at least three decades, South Africa’s financial services industry has raised the alarm about the urgent need to increase consumer savings. Yet little has changed. The elephant in the room is clear. Unless we meaningfully close the gap between product availability and true independent advice, this will not change.
South Africans face mounting pressure. Rising living costs and sluggish economic activity continue to erode disposable income. The macro household savings rate was negative at -1.10% in the second quarter of this year. This means households are drawing on savings rather than building them.
The consequences are stark. A looming retirement crisis exists, where only 6% of the population can retire comfortably. Meanwhile, younger generations increasingly shoulder the burden of supporting older family members.
The recently released Ipsos Cost of Living Monitor reveals a troubling picture. Only a minority of South Africans describe themselves as “living comfortably” or “doing alright”. Most say they are “just getting by” or “struggling financially”. Yet the same data shows a striking contradiction. It reports that South Africans are among the most optimistic globally about future income.
Around 46% expect their disposable income to rise in the next year. Simultaneously, they anticipate rising unemployment at 77%. They also believe inflation will continue climbing at 84%, which is the highest figure recorded among the countries surveyed.
The case for advice-led financial planning at scale
This combination of personal hope and economic anxiety underscores the urgent need for better financial planning support. Households need guidance that helps them manage economic volatility and prepare for future shocks. The solution is not more products. Instead, it is advice-led financial planning delivered at scale.
Until recently, independent financial guidance has not been available at scale. As a result, the majority of South Africans do not receive the kind of advice that enables proper planning. Many consumers interact with financial services only when prompted by a product sale. They rarely engage in holistic planning conversations.
What makes the difference is connecting consumers to qualified advisors who are not tied to a single insurer or motivated by sales quotas. People need transparent, relevant, and accessible advice delivered in ways that fit their daily lives. This applies no matter what their current financial situation looks like. Advice-led financial planning shifts the conversation from selling products to solving real financial challenges.
The benefits of closing this gap go far beyond individual wellbeing. Increased household savings translate into deeper domestic investment. Reduced debt improves overall credit health. Greater retirement readiness lowers future state welfare burdens. At a systemic level, advice-led financial planning strengthens financial resilience across households and the broader economy.
Technology as an enabler of advice-Led financial planning
While technology cannot replace people in this industry, digitally enabled advisory models can bridge the gap between interaction and accessibility. These models allow businesses to reach consumers who might not otherwise engage with traditional financial advice. This is not just a business opportunity.
Our purpose is built around a structural economic imperative to expand advice-led financial planning to underserved populations. The Ipsos findings show that South Africans expect nearly every aspect of their cost of living to rise in the next six months. This includes food at 82%, utilities at 79%, fuel at 73%, and rent at 54%.
Against this backdrop, proactive advice becomes critical for every South African. The country needs a shift that places people, not products, at the centre of financial decision-making. Advice-led financial planning provides the framework to make that shift sustainable and impactful.
