Push by international financial institutions in MENA’s wealth management sectors

By Gaia Lamperti

MENA wealth advisers expect a concerted push by international financial institutions to expand in the region and say their product ranges and approach to investor suitability will help them win business. They foresee the industry hitting $2 trillion faster than expected.

“The asset management industry in MENA is expanding strongly and inevitably that is attracting the interest of international financial institutions,” said Greg Davies, PhD, Head of Behavioural Finance, at Oxford Risk said. “At the same time, clients in MENA want to increase their exposure to international assets with the growing use of technology by advisers in the region and the need for diversification driving demand.”

New research surveying independent financial advisers and wealth managers in MENA found that 85% expect international firms to grow their presence in the region over the next three years. The study, commissioned by behavioural finance experts Oxford Risk, involved wealth managers in the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Egypt, Kuwait, and Oman.

More than half (52%) of them believe that the growing number of high net worth and mass affluent individuals in MENA is attracting interest from international firms. “Wealth advisers in the region believe international firms have a competitive advantage on product range but also on how they assess investor suitability and in some cases adviser skills,” Davies added.

Advisers believe the wider product ranges of international companies and their approach to investor suitability assessments give them an edge over local firms. Around 70% point to the products that international firms can offer while 54% highlight suitability assessments. More than half (51%) believe international firms have better digital capabilities while 48% say adviser skill sets at international firms give them a competitive advantage.

The research found advisers and wealth managers believe the asset management industry in MENA is expanding faster than predicted with 69% saying it will hit $2 trillion in assets under management before 2025 compared with the $1.2 trillion achieved in 2020. MENA investors are also looking to increase their exposure to international assets – two out of five (39%) of advisers expect them to dramatically increase it over the next three years.

Key findings

• The research with wealth managers in the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Egypt, Kuwait, and Oman, found 62% believe expansion is being fuelled by increased international investment in the region. More than half (52%) say the growing numbers of high net worth and mass affluent individuals in MENA are attracting interest from international firms.
• Advisers believe the wider product ranges of international companies and their approach to investor suitability assessments give them an edge over local firms. Around 70% point to the products that international firms can offer while 54% highlight suitability assessments. More than half (51%) believe international firms have better digital capabilities while 48% say adviser skill sets at international firms give them a competitive advantage.
• The research found advisers and wealth managers believe the asset management industry in MENA is expanding faster than predicted with 69% saying it will hit $2 trillion assets under management before 2025 compared with the $1.2 trillion achieved in 2020.
• MENA investors are also looking to increase their exposure to international assets – two out of five (39%) of advisers expect them to dramatically increase it over the next three years.