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Abu Dhabi, UAEMonday 17 December 2018

Rising Middle Eastern private wealth means advisers need to stay sharp 

Continuous training is key for financial service professionals to stay on top of a changing market

The UAE has the second highest number of billionaires in the Middle East behind Saudi Arabia, according to Shuaa Capital. Christopher Pike / The National
The UAE has the second highest number of billionaires in the Middle East behind Saudi Arabia, according to Shuaa Capital. Christopher Pike / The National

The Middle East’s economic fluidity has been running its course towards a more stable and robust investment growth despite inflection and fleeting profit and revenue pressures in the past years. This in turn is expected to have a significant impact on the growth of private wealth in the region for the years to come.

According to the Boston Consulting Group’s annual report called "Global Wealth 2017: Transforming the Client Experience", wealth in the Middle East and Africa (MEA) region is projected to soar up to $12 trillion by 2021, 21 per cent of which will be contributed by the UAE, Oman and Saudi Arabia. MEA countries will continue to keep a significant annual growth rate of roughly 8 per cent through to 2021— an optimistic future for the MEA’s financial services and wealth management industry.

According to Shuaa Capital, the UAE is estimated to have 35 billionaires and will house the second largest regional population of ultra-high net worth individuals (UHNWI) in the Middle East behind Saudi Arabia.

In order to keep numbers of UHNWIs in the UAE and wider region strong and rising in the years to come, financial service professionals and wealth managers in the region need to step up their offerings, with a wider range of strategic investments, deeper fintech integration, and digital advancement through expert channels.

Banking on the best practices in client relationship/loyalty, a more customised client journey experience can and should be created, highlighting well-thought-out wealth management business and operating models. But the wealth management offering gets even more efficient when companies implement quality certifications and globally-recognised regulations.

With an in-depth understanding of financial industry standards and requirements, international bodies for financial security like the Chartered Institute for Securities & Investment (CISI) have been key players in devising new strategies to pave the way for a healthy investment environment in the Middle East region. Their efforts to monitor professional development courses are aimed at raising industry standards across the region, to ensure the sector is fully equipped for the economic landscape and its specific demands, and is able to consider the needs of all net-worth segments.

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Continuous learning delivered by credible financial bodies is an integral part of business sustainability in the Middle East. Providing professionalism workshops and trust-building programmes should be a core priority in meeting clients’ expectations, especially for the region’s high-net-worth individuals. Considering the demand of the fast-growing number of affluent individuals in the UAE, a standardised qualification on financial services can help ensure a high-quality level of service across all industries.

In today’s economic climate, it is imperative that financial institutions are in sync worldwide, and operate with the same values, ethics and learning standards. This can be achieved through continuous professional development and learning with international accreditations. Regular updates and industry trends are essential to equip practitioners and professionals with an up-to-date, innovative learning methods in the modern digital age.

This is particularly vital in the era of FinTech, which is already transforming how banks and financial services firms do business. An EY survey in 2017 said that 70 per cent of the GCC banking sector is willing to integrate FinTech innovations into their businesses, enhancing consumer experiences and streamline operations.

A central strand of the UAE’s Vision 2021 development strategy is the transition to a knowledge-based economy, to “improve the country’s business environment and increase its attractiveness to foreign investment.” Equipping financial professionals with increased expertise across different disciplines falls squarely within this area. This will be achieved through strengthening financial skillset and competence, investing in technology and infrastructure to safeguard a conducive investment environment – a demonstration of visionary economic growth, both regionally and globally.

Matthew Cowan is the regional director of the Chartered Institute for Securities and Investment in the Middle East