United Arab Emirates (UAE) Wealth Management – High Net Worth (HNW) Investors 2022
The United Arab Emirates (UAE) wealth management market report analyzes the investing preferences and portfolio allocation of UAE’s HNW individuals. It profiles HNW investors in terms of their demographics, examines the allocation of HNW investors’ portfolios, analyzes their propensity to invest offshore, and explores their product and service demand.
What are the market dynamics in UAE wealth management market for HNW investors?
The majority of HNW individuals derive their wealth from earned income, while entrepreneurial income forms a smaller yet growing source. In November 2021, the UAE government introduced the Entrepreneurial Nation initiative, which aims to offer support to entrepreneurs through a series of public-private partnerships to expand their businesses, export their products, and tap into online sales. Considering the often more complex needs of entrepreneurs, wealth managers that can cater to entrepreneurs’ private and business financial needs will find this target audience to be more lucrative than professionals. Consequently, those pursuing a horizontally integrated business model cannot afford to ignore the power of business or investment banking referrals.
To encourage business creation and expansion, no income or corporate tax is levied in the UAE. In addition, the government has created specialist zones and agencies such as the Dubai Silicon Oasis Authority, which is a government-owned entity that provides a specialist business park for technology firms. These specialist zones aim to encourage foreign business entry and expansion in the market.
Family business is also a small but growing market. With such an emphasis on business creation and entrepreneurship, family business and entrepreneurship are expected to continue growing as a means of HNW wealth creation. It therefore represents a lucrative market for providers willing to reach out to them with targeted products. While the segments of self-generated wealth dominate the local HNW population, the share of inheritors is much higher than the global average.
What are the key investment preferences in for HNW investors in the UAE wealth management market?
The key investment preferences for HNW investors in the UAE wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management.
There is currently strong demand for all styles of asset management services. However, demand for advisory mandates, which currently dominate in terms of the AUM they attract, is expected to decline. In contrast, the report anticipates a rise in demand for discretionary mandates. In part, this can be attributed to the maturing of the local wealth management industry as well as growing levels of trust as wealth managers have navigated their clients though volatile market conditions following the outbreak of COVID-19.
UAE wealth management market, by investment preferences
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What are the key reasons for expatriation for HNW investors in the UAE wealth management market?
The key reasons for expatriation for HNW investors in the UAE wealth management market include job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability.
The UAE wealth management market, by reasons for expatriation
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What are the major asset classes of wealth allocation for HNW investors in the UAE wealth management market?
Equity, cash and near cash, bonds, property, alternatives and commodities are the major asset classes of wealth allocation for HNW investors in the UAE wealth management market. Bonds are traditionally a popular type of investment among Emirati HNW investors. The high allocation to bonds is largely due to the popularity of Sukuks, the Sharia-compliant bonds.
The UAE wealth management market, by asset classes of wealth allocation
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What are the major asset classes of offshore investment in for HNW investors in the UAE wealth management market?
The major asset classes of offshore investment in for HNW investors in the UAE wealth management market include equity, cash and near-cash products, bonds, property, alternatives, and commodities.
Alternatives are an important asset class for offshore investment. These are a natural response to market volatility, as many alternatives are prized for their hedging or uncorrelated returns. Wealth managers should focus on providing a wide range of alternative investment solutions to their clients to offer better diversification and hedging opportunities.
The UAE wealth management market, by asset classes of offshore investment
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Who are the key players in the UAE wealth management market?
The key players in the UAE wealth management market include Commercial Bank of Dubai, Masdar, and First Abu Dhabi Bank.
Market report scope
| Key reasons for expatriation | Job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability |
| Major asset classes of wealth allocation | Equity, cash and near cash, bonds, property, alternatives, and commodities |
| Major asset classes of offshore investment | Equity, cash and near cash, bonds, property, alternatives, and commodities |
| Key investment preferences | Advisory asset management, automated investment services, discretionary asset management, and execution -only asset management |
| Key players | Commercial Bank of Dubai, Masdar, and First Abu Dhabi Bank |
Scope
- Expats represent an attractive target market thanks to their more complex service requirements.
- The market for robo-advisory services is growing rapidly in the country’s HNW space.
- Equities, property, and bonds dominate UAE HNW investors’ asset portfolios.
Reasons to Buy
- Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
- Enhance your marketing strategies and capture new clients using insights from our data on HNW investors’ asset management style preferences.
- Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.
- Develop your service proposition to match the demand expressed by UAE HNW investors and react proactively to forecast changes in demand.
Key Players
Table of Contents
Frequently Asked Questions
Advisory asset management, automated investment services, discretionary asset management, and execution-only asset management are the various investment services for HNW investors in the UAE wealth management market.
Job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability are the key reasons for expatriation for HNW investors in the UAE wealth management market.
Equity, cash and near cash, bonds, property, alternatives and commodities are the major asset classes of wealth allocation for HNW investors in the UAE wealth management market.
Equity, cash and near cash products, bonds, property, alternatives, and commodities are the major asset classes of offshore investment for HNW investors in the UAE wealth management market.
Commercial Bank of Dubai, Masdar, and First Abu Dhabi Bank are the key players in the UAE wealth management market.
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