Over past year, the total number of companies offering wealth management solutions soared by 22 per cent to reach a new record of 240 regulated organisations across the GCC, a new report showed.
The 13th and latest edition of the Middle East Investment Panorama (MEIP) report of Insight Discovery, a financial services consultancy firm, looks beyond the boom in wealth management that are described by these figures.
“These hard numbers fully justify the optimism that pervades the wealth management industry in this part of the world. The key players have clear ideas of what they need to do to compete in an environment where their clients are becoming ever more knowledgeable. In particular, these organisations recognise the importance of attracting, retaining and developing the right client-facing staff. The regulatory environment is also favourable. The rise in the number of wealth management companies is particularly encouraging, being spurred on by the number of expats moving to the region and the growth in the economy. The implication is that investors across the GCC region have significantly greater choice,” said Nigel Sillitoe, the firm’s chief executive officer.
Collectively, the changes that have taken place since the beginning of 2023 are so fundamental that Insight Discovery delayed the publication of the MEIP report so that it could incorporate findings from their recent Middle East Wealth Change (MEWX) event in Dubai.
Insight Discovery’s annual survey amongst CEOs and fund advisers – another feature of the MEIP report – also presented a very positive picture.
Conducted during 2023, the survey found that most respondents were upbeat. Some 53 per cent had grown their businesses over the previous 12 months. Meanwhile 73 per cent expected that their businesses would expand over the coming 12 months (i.e. into early 2024).
Another finding was that the fund advisers increasingly favour alternative asset classes.
There are a number of reasons for this. Retail investors have greater access. The GCC countries are being seen as increasingly attractive for inwards investment in private equity (PE) and venture capital (VC) opportunities. Institutional investors – whose AUM is growing – also have a strong bias in favour of alternative assets.
“After years of false starts, excessive hype and promises of ‘jam tomorrow if not today’, the broadly defined wealth management sector of the GCC region can look forward to a great year in 2024-25 and beyond,” Silitoe said.
What really matters is that none of these challenges are evident in Dubai, Abu Dhabi, Riyadh and other key centres across the region. Wealth management in the GCC countries will — at some point — reach maturity: however, that is not going to happen in the next 12 to 18 months, the study showed.