United Arab Emirates (UAE) Wealth Management – High Net Worth (HNW) Investors
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UAE Wealth Management Report Overview
The UAE HNW population is dominated by men. Moreover, more than half of UAE HNW individuals are aged 41–60, meaning they are approaching or have already reached retirement age. Wealth preservation strategies will therefore resonate strongly with this segment. The proportion of female HNW individuals remains low but the situation is slowly evolving. Female HNW investors, particularly entrepreneurs, constitute an increasingly attractive target segment. This is partly due to initiatives such as She’s Next, which was launched in the UAE in June 2022 by Visa, First Abu Dhabi Bank, and the Dubai Business Women Council.
The UAE wealth management market report analyzes the investment preferences, service requirements, and portfolio allocation of UAE’s HNW investors. The report is based on GlobalData’s proprietary Global Wealth Managers Survey.
Key Investment Preferences | · Advisory Asset Management
· Automated Investment Services · Discretionary Asset Management · Execution-Only Asset Management |
Key Reasons for Expatriation | · Better Lifestyle Conditions
· Better Opportunities for Expats’ Children · Business Start-Ups · Political or Economic Instability in The Origin Country · Retirement · Tax efficiencies |
Key Asset Allocation Classes | · Equity
· Bonds · Cash and Near Cash · Real Estate · Commodities · Alternatives |
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UAE Wealth Management Market Dynamics
The majority of HNW individuals derive their wealth from earned income, while entrepreneurial income forms a smaller yet growing source. In October 2022, the government introduced the second phase of The Entrepreneurial Nation initiative to support over 8,000 startups and SMEs in the UAE and develop over 20 startups into unicorns by 2031. In December 2022, the Government of Abu Dhabi launched the Abu Dhabi Entrepreneurship Initiative to help develop an ecosystem of local and expat entrepreneurs. The initiative will offer training and startup accelerator programs to support the growth of the tech ecosystem in Abu Dhabi, in addition to thought leadership events, networking events, and mentorship events.
Given that entrepreneurs have more complex financial needs as both their private and business activities need managing, wealth managers will find this segment to be more lucrative than professionals. Family businesses are a small but growing segment as well.
For more insights into the UAE wealth management market dynamics, download a free report sample
UAE Wealth Management Market - Investment Preferences
The key investment preferences in the UAE wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management. There is currently a strong demand for all styles of asset management services. However, forecast demand for discretionary mandates is set to be low compared to other mandates as investors look for greater involvement. In part, this can be traced back to rising volatility, which means investors want to be more hands-on. In addition, UAE HNW investors are becoming increasingly sophisticated, driving uptake in execution-only and advisory mandates.
UAE Wealth Management Market - Reasons for Expatriation of HNW Investors
The drivers of expatriation to UAE are better lifestyle conditions, better opportunities for expats’ children, business start-ups, political or economic instability in the origin country, retirement, and tax efficiencies. Better lifestyle conditions act as the main expatriation factor. Wealth managers should provide auxiliary services such as supporting HNW expats in finding a school for their children, as these have the potential to create goodwill. Wealth managers that have an international footprint and are supportive of their clients’ banking needs in their home country will find the expat market particularly attractive, given their complex needs.
UAE Wealth Management Market Analysis by Reasons for Expatriation, 2022 (%)
For more expatriation reason insights into the UAE wealth management market, download a free report sample
UAE Wealth Management Market - Asset Allocation Classes
The major asset allocation classes for HNW investors in the UAE wealth management market include equity, bonds, cash and near-cash, real estate, commodities, and alternatives. Cash and near-cash constituted the majority of the UAE’s total asset allocation in 2022. Property has proven to be a prudent investment thanks to the steep increase in the UAE’s property prices. The launch of the golden visa scheme – which offers residency permits for remote workers and individuals who have retired – and other related stimulus measures are driving demand for such investment.
UAE Wealth Management Market by Asset Allocation Classes, 2022 (%)
For more asset allocation class insights into the UAE wealth management market, download a free report sample
UAE Wealth Management Market Asset Classes Outlook (2022)
- Equity
- Bonds
- Cash and Near Cash
- Real Estate
- Commodities
- Alternatives
Scope
- Expats constitute a noteworthy 29.3% of the local HNW population. They represent an attractive target market thanks to their more complex service requirements.
- Robo-advice accounts for 6.8% of the UAE HNW portfolio. The market for robo-advisory services is growing rapidly in the HNW space in UAE.
- The average UAE HNW investor offshores 48% of their wealth abroad. This proportion is expected to increase over the next 12 months.
Key Highlights
- Expats constitute a noteworthy part of the local HNW population. They represent an attractive target market thanks to their more complex service requirements.
- Robo-advice accounts for more than 6% of the UAE HNW portfolio. The market for robo-advisory services is growing rapidly in the HNW space in UAE.
- The average UAE HNW investor offshores constitutes a little less than 50% of their wealth abroad. This proportion is expected to increase over the next 12 months.
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 current and future demand for different asset classes among HNW individuals.
Table of Contents
Frequently asked questions
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Which is the leading investment preference in the UAE wealth management market?
Asset management services lead in terms of investment preferences in the UAE wealth management market.
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What is the leading reason for the expatriation of HNW investors in the UAE wealth management market?
Better lifestyle conditions is the primary reason for the expatriation of HNW investors in the UAE wealth management market.
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Which is the leading asset class for HNW investors in the UAE wealth management market?
Cash and near-cash is the leading asset class for HNW investors in the UAE wealth management market.
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