By Adelaide Changole.
Momentum Group is seeking to buy businesses as the South African investment and medical-insurance company looks to boost the number of financial advisers and drive sales.
“We are almost in the acquisition space to see how we can exponentially grow our own advisory force and we need that in order to secure growth, especially in our life products,” Chief Executive Officer Jeanette Marais said in an interview Thursday.
Momentum has a smaller agency base than that of its competitors because its strategy has been to distribute products through independent financial advisers, she said. It is now pivoting to bolt-on acquisitions because of rising demand for more specialised products, and as the company seeks greater market share.
South Africa has many small advisory networks that are nearing the limits of their growth and are seeking capital to recruit more advisers and expand, she said. The sector is also grappling with rising governance requirements and mounting technology, compliance and administrative costs, prompting smaller independent advisers to partner with larger firms.
Marais said independent advisers are attracted to Momentum because it keeps its network independent, which allows advisory groups to grow without too much interference.
“We are in quite a lot of strategic conversations there because it’s also a market where you need a bit of consolidation,” she said. “We are making sure that we do more than just organic growth.”
South Africa’s financial-advisory sector is experiencing a steady structural shift toward networks and selective consolidation.
The insurer’s announcement comes as it said normalised headline earnings increased 13% to R7.06 billion ($430 million) in the 12 months through June.
The firm surpassed a target of R7 billion in headline earnings for the first time, a year earlier than originally planned.
The group declared a final dividend of R1.20 per share, lifting the full-year payout by 31% to R2.30.
The stock fell 2.1% to the lowest since June 9 at 11:41 a.m. in Johannesburg. It is working on its next strategic plan that will stretch from 2027 to 2030, and plans to announce it within the next 12 months.