Stanbic Bank Ghana Limited, a subsidiary of Standard Bank Group of South Africa, has established a Wealth and Investment Unit to cater for the needs of Ghana’s growing High Net Worth Individuals (HNWIs).
The bank is now targeting HNWIs worth more than US$1 million both in Ghana and the diaspora with financial products to grow their wealth.
Stanbic Bank is the first to establish an entirely new Wealth unit for HNWIs in Ghana, although other banks provide similar services.Wealth management is a high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning and legal or estate planning.Ghana has experienced the fastest HNW growth rates in Africa over the past 14 years and will continue to grow as the Ultra High Net Worth class increases by 85 per cent over the next ten years, according to the 2016 Knight Frank Wealth Report, which was launched in Africa in partnership with Standard Bank Wealth and Investment.
The Knight Frank Wealth Report is an annual report which tracks and documents the performance of prime property and its interaction with wealth creation globally. While few markets or regions escaped the effects of the global financial crisis of 2008, large amounts of new wealth has been created, particularly in emerging economies, including Ghana.
According to the report, the trends of the decade show that “although most markets, with the exception of South Africa, remain small by international standards, modern property development has gathered pace and the stock of investment-grade commercial property has increased.”
Significantly, the 2016 Knight Frank report reveals that there were only 500 individuals with US$1 million in Ghana in 2000, but this figure has risen to 2,700 in 2015, representing the highest growth all of Sub-Saharan Africa.
HNWIs in Ghana are forecasted to grow to 5,000 by 2025, the report says. This growth reflects the increase in asset prices and investment returns, primary residence and second homes and personal businesses.
On the back of this new wealth
The creation of the Wealth Unit by Stanbic is on the back of this new wealth created in Ghana in the past 14 years. Ghana discovered oil in 2007 and commercial production started in 2010. The commercial production and export of oil added adding to the country’s Gross Domestic Product (GDP), making Ghana the second biggest economy in West Africa.
Ghana attained middle income status in the same year and in 2011, the country reported the highest GDP growth rate in the world.In Ghana, which boasts a rich history of successful entrepreneurs, the HNWI market is largely represented by entrepreneurs who have built successful businesses spanning a number of industries and sectors.
Speaking at the launch of the Wealth and Investment Unit, Alhassan Andani, Managing Director of Stanbic Bank, says “Ghana is set to benefit from growing economic opportunities fueled by stable leadership, strong governance and economic opportunities from an increasingly diversified economy led by investments in infrastructure and real estate among others.” To get the most out of these opportunities, Andani explains “require the right level of specialised and personalised financial services support, as provided for by Stanbic Ghana’s new Wealth and Investment proposition.”
Deon de Klerk, Head of Africa and International for Standard Bank Wealth and Investment, highlights that the changing economic climate would profit Ghana’s HNWIs if they have more domestic investment opportunities and enhanced access to holistic wealth solutions.”This is particularly relevant as research shows that the country’s wealthy are, increasingly, concerned about not only creating wealth but how to protect existing wealth by managing risk through uncertain times and preserving wealth between generations, while also leaving a broader social legacy through high impact philanthropy,” says De Klerk.
Sim Tshabalala, Standard Bank Group CEO, affirms Standard Bank’s confidence in Ghana. This assurance, Tsabalala explains, is supported by recent statistics and current economic forecasts.”Ghana is an excellent place to launch a Wealth and Investment business not just because it’s booming now, but also because of its long and proud tradition of entrepreneurship and business innovation, even under very difficult circumstances,” he says.
“This heritage of innovation, determination and resilience is a major part of the reason why Ghana’s economy is now among the very few in the world that have continued to grow rapidly despite persistently difficult global conditions. And Ghana is, of course, poised to grow even faster, as the TEN [Tweneboa-Enyera-Ntomme] oilfield comes on stream, and as the country gears up to become, in all probability, the fourth biggest oil producer in sub-Saharan Africa over the next five years,” he adds.
Benjamin Mensah was recently appointed
Benjamin Mensah was recently appointed to head the newly-created Wealth and Investment division at Stanbic Bank. Mensah says: “Ghana’s latest crop of entrepreneurs are globally connected and have a broad view of the kind of wealth creation and preservation tools required to meet their lifestyle goals while building global capital streams to drive the next wave of growth and opportunity in Ghana.”
Stanbic Bank has a long association with Ghana’s business leaders, largely through its Personal and Business Banking franchise and has built a solid network of HNWI clients across the country.”Our Wealth and Investment offering will further strengthen our relationships with our clients by providing them with tailored solutions in this highly exciting and entrepreneurial African market,” Mensah assures.
Benjamin Mensah explains to GB&F that the new Wealth Unit is built around four key themes. “The first is Building wealth and this is to help excellent Ghanaian entrepreneurs and business people who are making money to grow their wealth and continue to make more money.
This complements our investment banking or business banking franchise for them to continue to do more business. We also help them with what we call “inner circle” which helps them to network with each other who will in turn also network with other players in the industry so they continue to do more business and build more of that wealth,” Mensah explains.
Continuing, Mensah says: “the second is Lifestyle wealth. This means when you have wealth, you want to have a certain lifestyle that will fit that status so we also look at how we can bring other solutions to enhance that lifestyle.
This lifestyle could be trying to buy a home in London or buying a home in a part of London or wherever, we can facilitate that and we have a relationship with a real estate firm in the UK called Knight Frank. Knight Frank can help source for property, to acquire them or even manage them. Maybe you do a buy-to-let, which is where we get a property for you in London and then rent it out for you to get the income on it. We can also finance that property for you.”
“It also comes with other transactional stuff such as having a Premium card, which is Visa enabled and comes with 24/7 concierge service worldwide, travel insurance, with lovely discounts on hotel bookings, restaurants, shopping centres etc. on purchases you make on the card.”
One of fears business people have is uncertain economic environments impacting negatively on their future wealth. According to Mensah, the fear is catered for by the third pillar.“We also have Wealth preservation.
It is important that the clients look beyond things like fixed deposits into the long-term. It is important that if you have a child who is 10 years old, and you would want that child to go to an Ivy League university someday, you would have to have a plan that says in the next 10 years you would have to have so much [to pay for the Ivy League education]. So we are talking about something that can take of inflation and the volatility in the markets, then we have the investment pedigree to be able to that,” he says.
Brilliant and successful Ghanaian entrepreneurs
Many brilliant and successful Ghanaian entrepreneurs do not outlive their businesses. Death determines their investments and assets. This is a social problem that the new Wealth Unit was created to remedy.
The head of the Wealth Unit explains why: “Then the final pillar or theme we have is legacy wealth. This takes care of inter-generational transfer of wealth. How can the current crop of wealth be passed on to the next generation and have that money stay in the family for subsequent generations?
That is a critical part of what we do. For legacy wealth, we do a number of things including helping set up trust structures. This ensures that your estate is properly managed after your death. It is not just about making a will. This trust structure will help to ensure that your estate is properly managed even after you are dead and gone.”
“In Ghana, we grew up seeing great families who are no more. What happened to their money? Data suggests that 70 per cent of wealth that is transferred to the next generation gets whittled away. And by the third generation, 90 per cent of that wealth is gone.
It is a big problem in this part of the world. It is one of the things that we are good at and want to help our clients sort out,” Mensah promises.One good thing about this pioneering product for HNWIs is that it caters to the needs of the entire family.
“Also inclusive is what we call leadership academy. Here we start by training or running academies for the children of our clients for them to start understanding the importance of money, savings, investing, not living beyond their means, and understanding how to make even more money. All these are done to ensure that wealth can stay on in the family over generations to come. So what we over is a complete suite of things, not just a service in a bank,”he adds.
By Anthony Sedzro, GB&F
