Estate Planning Gaps Most South African Investors Miss

SARB's rate cut on 31 July to 7% signals confidence in controlled inflation, while global tech continues its AI-driven rally. But September brings a critical reminder: it's Wills Month in South Africa, and 70% of South Africans still don't have valid wills.

Here’s what matters from last month:

THREE MARKET OPPORTUNITIES 🎯

1. Global AI Rally Accelerates with Infrastructure Boom

The global technology sector, particularly AI and software companies, maintained explosive momentum in August as U.S. AI data center power demand surged. Substantial investments in clean energy and infrastructure are supporting this growth, with the S&P 500 tech sector gaining further ground led by companies investing heavily in AI capabilities. The opportunity: South African investors accessing global markets via offshore structures, ETFs, or local tech holdings like Naspers/Prosus can benefit from this secular growth trend that shows no signs of slowing.

2. SARB Cuts to 7% Unlock Credit-Sensitive Sectors

The SARB cut the repo rate to 7% on July 31st - the lowest since late 2022 - while inflation rose mildly to 3.5% in July but remained within target. This monetary support signals confidence in economic growth despite ongoing challenges in mining and manufacturing. The opportunity: Rate cuts dramatically improve affordability on loans and mortgages, supporting consumer spending and property markets, while creating favourable conditions for credit-sensitive investments and cyclical sectors.

3. JSE Posts H1 Performance with 13.2% Profit Growth

JSE Group reported a 13.2% increase in net profit after tax in H1 2025, driven by broad-based revenue growth across Capital Markets (+16%) and Post-Trade Services (+17%). Equity market activity remained elevated despite global geopolitical tensions, highlighting market resilience and diversification success. The opportunity: Robust JSE performance reflects healthy market depth and investor confidence, reaffirming equity market participation as a key wealth-building strategy while local exchange benefits from global volatility.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

TWO REALITY CHECKS ⚠️

#1: The Estate Planning Crisis Most South Africans Ignore

With a valid will, your assets transfer according to your wishes through a Master of the High Court-appointed executor. Without one, the Intestate Succession Act distributes assets by law, which may not reflect your actual intentions. The transfer process can take months or years depending on estate complexity. The wake-up call: Having a valid will accelerates and clarifies asset transfer, reduces disputes, and ensures beneficiaries receive intended inheritances without unnecessary delays - yet 70% of South Africans die without proper estate planning.

#2: Minors Can't Inherit Directly - Your Kids Are at Risk

Minors under 18 cannot directly inherit assets - their money goes into the Guardian's Fund earning minimal returns instead of growing wealth. Testamentary trusts set up in your will manage minor beneficiaries' assets until they reach a specified age (often 21), while trustees handle distributions for education and living expenses. The harsh reality: Without proper planning, your children's inheritance gets locked in low-return government funds instead of building generational wealth through proper investment management.

ONE ACTION TO TAKE 🚀

Secure Your Estate During South Africa's Wills Month

September is South Africa's official Wills Month, making this the perfect time to protect your family's financial future while positioning your portfolio for the current market opportunities created by rate cuts and AI growth.

Here's how to get started:

• Immediate: Create or update your will this month - use September's focus on estate planning to ensure your assets transfer according to your wishes

• Protection: Set up a testamentary trust for minor beneficiaries to protect their inheritance and manage funds until adulthood

• Coverage: Review life insurance needs, factoring in school fees, debts, and household expenses to protect your family's financial stability

• Growth: Take advantage of 7% rates by increasing exposure to property, consumer discretionary, and financials while maintaining global AI exposure

The difference between investors who build wealth and those who don't? Taking action on the right information at the right time.

Take the Next Step For Investors: Don't know your risk profile? Discover if these opportunities match your goals: Find Your Finimal

For Advisors: Join our growing network of fee-only professionals helping South Africans achieve FIRE: Chat to Travys

Your money matters. Make it count.

See you next month,

The FinMeUp Team