South Africa is one of the unequal countries in the world which means that what it takes to be ‘rich’ can be highly subjective.
A March 2019 report from Bloomberg found that you will need $162,000 (R2.21 million) annual pre-tax income to be considered in the top 1% of earners in the country.
This is significantly higher than India (R1.1 million) and China (R1.43 million), but substantially lower compared to developed nations such as the USA (R6.5 million) and the UAE (R12.1 million).
However, finance researchers have traditionally used the more general term of ‘high net-worth individuals‘ (HNWIs), and the barrier for entry into that elite group is $1 million (R14.45 million).
According to the latest data on high net-worth individuals (HNWIs) in the Knight Frank report, at the end of 2018, there were approximately 52,926 HNWIs in South Africa, each with net assets of $1 million or more.
At the end of December 2017, there were 51,110 HNWIs recorded, pointing to an increase of 1,800 dollar millionaires over the period.
Further, the group expects the number of HWNIs in the country to grow by 16% to 61,474 millionaires over the next five years – running counter to the idea that wealth is leaving the country en masse.
To open an FNB Private Wealth account you will need an annual salary of R1.5 million and investable assets of R15 million.
By comparison, you will need an annual salary of R1.1 million to open a Standard Bank Signature account, and an annual salary of R750,000 to open an Absa Private Banking account.
The table below outlines the various requirements needed to access private banking in South Africa, as well as an average value based on the numbers.
Taking the above into consideration, the value to be considered a HNWI in South Africa is more or less on par with the $1 million used by researchers, in that the average ‘rich’ person who qualifies for private banking, would either have a monthly salary of R94,100 a month – or net assets worth R13 million.
|Bank||Annual salary needed||Monthly salary needed||Investable assets|
|FNB Private Wealth||R1 500 000||R125 000||R15 million|
|Nedbank Private Wealth||R1 500 000||R125 000||R5 million|
|Standard Bank Signature||R1 100 000||R92 000||–|
|Investec Private Bank||R800 000||R66 700||R20 million|
|Absa Private Banking||R750 000||R62 500||–|
|Average||R1 130 000||R94 100||R13 million|