Technology reshapes how investors access markets

Artificial intelligence, digital platforms, and broader technological advances are reshaping the global financial advisory sector.

This transformation is being accelerated by the largest intergenerational wealth transfer in history – the movement of assets from baby boomers to millennials and Generation Z.

The expectations of younger inheritors differ markedly from those of previous generations.

They demand digital-first service delivery, transparent pricing, and greater personal control over their financial decisions.

Research firm Forrester has predicted that more than half of consumers under 50 will turn to generative AI tools as a first step when seeking financial guidance – a finding that underscores just how significant this shift is likely to be.

South Africa: A well-developed sector, slow to adapt

South Africa’s financial advisory industry is well-established and profitable, but its adoption of AI and digital tools lags behind international peers.

The contrast is stark.

US/European firms
South African firms

GenAI adoption rate
>80%

Primary use cases
Advice, risk modelling, portfolio management
Sales, marketing, back-office operations

Note: Adoption rate figures are sourced from industry surveys current at time of writing.

Slow regulatory adaptation and entrenched commercial interests have contributed to this lag – but the consumer benefits of digital transformation are compelling enough that broader adoption appears inevitable.

Core benefit: Democratising investment

The most significant outcome of digital transformation in financial services is the democratisation of investment.

Products and information that were previously available only to high-net-worth individuals and institutional investors are increasingly accessible to anyone with a smartphone and a modest amount of capital.

These newer products also tend to come at lower cost and with greater transparency.

Actively managed certificates

Actively managed certificates (AMCs) are one product category that exemplifies this shift.

Originating in Switzerland – with institutions such as UBS and BNP Paribas among the early pioneers – AMCs have grown into a significant global asset class. Globally, the market has scaled to more than $1 trillion in assets under management, with over R25 billion listed on the JSE.

The key benefits of AMCs for investors include:

Access to focused, professionally managed share portfolios without the need for a bespoke mandate – AMCs are bought and sold as listed instruments on the JSE;
No capital gains tax (CGT) liability on trades executed within the AMC structure;
Exposure to international assets within a familiar listed instrument;
The ability to spread capital across different portfolio strategies;
Cost efficiency relative to traditional actively managed unit trusts;
For the asset manager, the simplicity of managing a single portfolio without CGT constraints enables greater concentration and conviction; and
Daily liquidity, providing investors with flexibility.

ETFs and active ETFs

Exchange-traded funds (ETFs) and the newer active ETFs (AMETFs) represent a further evolution in accessible investment products.

Both are widely used globally and in South Africa, offering investors exposure to a broad range of asset classes. They are typically lower in cost than actively managed unit trusts, provide daily liquidity, and offer full transparency of holdings.

Most of the benefits associated with AMCs also apply to ETFs, making them a practical building block for retail investors.

Fractional ownership

Platforms such as EasyEquities have introduced fractional ownership of shares, ETFs, real estate, and other asset classes – making previously inaccessible investments available to a far broader audience.

Looking ahead, retail investors may soon be able to access private equity through similar mechanisms, a development that would represent a meaningful expansion of the investment universe for ordinary South Africans.

The road ahead: AI-driven advice

The pace of transformation is expected to continue accelerating, with AI-driven robo-advisors likely to play an increasingly prominent role.

These tools have the potential to deliver personalised, high-quality financial guidance at a fraction of the cost of traditional advisory models.

The collective direction of these developments is clear: financial advice and sophisticated investment products are becoming more accessible, more affordable, and more transparent.

MH Capital’s role in this journey

MH Capital is actively participating in this transformation.

Our AMC is already available to all investors on the JSE, providing access to a concentrated portfolio of local and international shares across market capitalisation ranges.

We are also exploring options to broaden access to our private equity portfolio, which is currently available only to a select group of investors. Digital transformation has the potential to change this – to the benefit of smaller investors seeking diversified exposure, and private companies looking to attract a wider pool of capital.

After years of incremental change, the financial advisory sector appears to be approaching an inflection point.

Driven by technology, shifting demographics, and evolving consumer expectations, the industry is moving towards a model that is more inclusive, more transparent, and better priced.

For investors willing to engage with these developments, the opportunities are significant.

Disclosure: MH Capital is a South African investment manager that offers an Actively Managed Certificate (AMC) listed on the JSE. This article reflects the views of MH Capital and should be read in that context. It does not constitute financial advice.

Brought to you by MH Capital.

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