Women’s wealth in the Middle East to grow an average 9% annually by 2023, says BCG
Females account for $786bn of assets under management in the region, including $103bn in the UAE and $224bn in Saudi Arabia
Women’s wealth in the Middle East is set to grow at a 9 per cent compound annual growth rate (CAGR) of 9 per cent up to 2023, according to the Boston Consulting Group.
Females account for 24 per cent of $3.2 trillion (Dh11.7tn) of total assets under management in the Middle East, according to 2019 BCG data, published on Monday. The women’s wealth share includes $103bn in the UAE and $224bn in Saudi Arabia.
The segment is expected to grow at a CAGR of 8.3 per cent in the UAE and 5.1 per cent in Saudi Arabia. However, BCG said wealth managers must shift their culture to become more inclusive and adopt a more personalised approach.
"Examining preconceptions about female investors, moving beyond labels to treat the individual, and adopting an objective-based and evidence-backed advisory approach will enable wealth managers to ensure the full potential of women is realised in the decade ahead," said Mustafa Bosca, managing director and partner at BCG in the Middle East.
When women invest, they do a better job than men, according to a 2018 study by Warwick Business School in the UK. Women trading shares and funds made a 1.94 per cent average gain above the market compared to men’s 0.14 per cent, it found.
Meanwhile an April BCG report titled Managing the Next Decade of Women’s Wealth, found that women across the globe are amassing greater wealth than before, adding $5tn to the pool every year and now accounting for 32 per cent of global wealth.
The consulting firm said it expects women’s wealth to outpace global wealth growth over the next several years, despite the economic impact of the coronavirus.
From 2016 to 2019, women accumulated wealth at a CAGR of 6.1 per cent. Over the next four years, that rate will accelerate to 7.2 per cent, BCG said.
“The expected rise in women’s wealth in the Middle East is especially noteworthy,” the report said. “Greater political and economic stability across the region and improving healthcare and educational access for women are fanning the expected 9 per cent CAGR.”
The report cites examples of improvements in educational access, such as: girls’ rates of primary and secondary school participation are now similar to boys’, and women outnumber men at the university level in 15 of 22 Arab countries. In Bahrain, girls consistently make up the majority of top-ten high school graduates.
In the UAE, women in leadership positions have increased 2.4 per cent, while women in entrepreneurial activities and labour force participation in Saudi Arabia increased 1 per cent and 0.5 per cent, respectively.
“The opening up of the Middle East is further evidence that expanded access to education and health care can have positive implications for women," said Mr Bosca.
"Labour force participation, leadership positions, entrepreneurial activities and economic empowerment all play important roles in economic advancement, which will, in turn, contribute to further growth in women's wealth over the next decade.”
Despite their increasing purchasing power, women remain largely underserved by wealth managers, according to BCG.
In BCG’s global investor survey of 300 male and female affluent and high-net-worth individuals, 30 per cent of women said their relationship manager spoke to them differently because of their gender, while 64 per cent said their bank or wealth management provider needs to improve its value proposition.
Updated: June 1, 2020 05:37 PM