Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
Across the Gulf Cooperation Council (GCC), the wealth management industry is experiencing unprecedented growth, as evidenced by a recent report from Insight Discovery which revealed a 22% surge in the number of wealth management companies in 2023, reaching an all-time high of 240 across the region.
“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,” said Insight Discovery CEO Nigel Sillitoe in the latest edition of the Middle East Investment Panorama (MEIP) report released by the financial consultancy.
“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.”
Sillitoe attributed the surge to a convergence of favourable conditions, including a business-friendly regulatory environment, rising client sophistication, and the steady influx of expatriates.
Insight Discovery’s annual survey among CEOs and fund advisers further reinforces the positive outlook for the wealth management industry. The survey found that most respondents were upbeat about the future, with 53% reporting growth in their businesses over the previous 12 months.
Additionally, 73% expressed optimism about their business prospects over the coming year, highlighting the continued confidence in the region’s investment climate.
“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”, added Andrew Hutchings, senior consultant at Insight Discovery.
“No industries grow rapidly forever. This is true for wealth management. Growth can slow down due to any number of factors: demographic changes may mean that asset pools are no longer expanding; supply of wealth management services can outstrip demand; competition from distant financial centres may be intense; regulatory decisions may be flawed; and financial markets may move in unfortunate directions.
“None of these challenges are evident in the GCC region. Wealth management in Dubai, Abu Dhabi and other centres across the GCC region will – at some point – reach maturity. However, that will emphatically not happen in 2024-25.”
In addition to the rise of wealth management firms, the GCC region has also witnessed significant growth in other segments of the financial services industry. External asset managers, for example, have seen their numbers grow from 54 to 75, reflecting the increasing demand for tailored investment solutions. Similarly, the number of online trading platforms has increased from 20 to 25, underscoring the growing popularity of digital investing.
Private banks, while growing at a slower pace, have also seen an uptick in their numbers, rising from 57 to 62. This growth is indicative of the region’s increasing wealth and the need for sophisticated banking services to cater to the needs of high-net-worth individuals and families.
