Middle East and North Africa (MENA) wealth advisers expect a concerted push by international financial institutions to expand in the region, according to behavioural finance experts Oxford Risk.
It carried out a study with independent financial advisers and wealth managers in MENA who collectively manage assets of around $290 billion (AED 1,065 billion). Research found that 85 percent expect international firms to grow their presence in the region over the next three years.
The research, which covered wealth managers across the UAE, Saudi Arabia, Bahrain, Qatar, Egypt, Kuwait and Oman, found 62 percent believe expansion is being fuelled by increased international investment in the region.
More than half said that the growing numbers of high net worth and mass affluent individuals in MENA is 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,” the report stated.
Just over half believe international firms have better digital capabilities while 48 percent said 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 percent saying it will hit $2 trillion (AED 7.35 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 percent) of advisers expect them to dramatically increase it over the next three years.
Oxford Risk wants wealth advisers in the region to make more use of technology to provide improved their services to clients based around understanding their needs through detailed profiling.
Head of Behavioural Finance at Oxford Risk, Greg B Davies, said:“The asset management industry in MENA is expanding strongly and inevitably that is attracting the interest of international financial institutions.”
Oxford Risk believes the best investment solution for each investor needs to be anchored on stable and accurate measures of risk tolerance.
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