The leadership hurdles facing South Africa's asset managers in 2025

As South Africa approaches 2025, the financial sector remains precariously balanced against a backdrop of global economic uncertainty and localised pressures.

Asset managers are grappling with modest domestic growth, evolving regulatory frameworks, and an increasingly demanding investor community seeking innovative products.

In light of these challenges, Phryne Williams, CEO of Capital Assignments, identifies three core leadership hurdles that asset management firms must navigate to ensure resilience and adaptability in an unpredictable landscape.

1. Leadership and talent retention challenges

The competition for top-tier talent within the asset management sphere is fierce.

Firms are under immense pressure not only to attract but also to retain capable leaders. With over 30 years of experience in executive recruitment, Williams shares insights into the hiring process, urging firms to streamline and professionalise their approaches.

“The hiring process is a proxy for how the firm operates,” she states, emphasising that delays and convoluted processes can cost firms their ideal candidates.

To accelerate recruitment, Williams recommends clearly defined roles and expected outcomes as well as prompt communication throughout the hiring journey.

By respecting the time of senior candidates and ensuring transparency, firms can cultivate a culture that attracts high-calibre leaders.

While competitive salary packages remain important, Williams highlights a shift among candidates toward long-term wealth-building incentives.

Beyond a robust base salary, prospective leaders often seek alignment with companies offering clear paths to equity or other performance-based rewards.

“Candidates are looking for opportunities to build wealth over time, rather than just immediate financial gain,” she concludes.

2. Regulatory and compliance pressures

The South African asset management industry is increasingly scrutinised by regulatory authorities such as the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA).

In addition to compliance, firms must uphold Broad-Based Black Economic Empowerment (B-BBEE) standards, requiring genuine transformation in ownership stakes and management control.

Williams stresses that meaningful progress in this area relies on a year-round commitment to fostering inclusion.

“Setting clear leadership composition targets and investing in development for women and black professionals is paramount,” she asserts.

Companies can struggle when diversity initiatives falter at critical levels, and opaque criteria can hinder advancement, leading to higher attrition rates.

Williams advocates for proactive leadership development, transparent promotions, and tangible sponsorship of diverse talent to foster inclusivity as core business strategies.

3. The trials of digital transformation

Amid technological advancements, digital transformation has taken centre stage in the financial services industry.

The urgency to adapt means that asset managers must not only attract digital talent but also embed digital innovation within their leadership ethos.

“The importance of leaders who are attuned to digital innovation cannot be overstated,” Williams explains.

As firms confront the complexities surrounding data protection, compliance, and the integration of artificial intelligence, the need for effective change management becomes crucial.

Williams advocates for robust upskilling and reskilling programmes to prepare teams for the digital evolution while ensuring responsible technology usage in the workplace.

These three formidable challenges underscore a significant shift in leadership expectations within South Africa's asset management sector.

As geopolitical uncertainties linger and markets remain volatile, the need for adaptable leaders equipped with a diverse skill set has never been more critical.

BUSINESS REPORT