Personal financial wealth in the UAE is expected to hit $600bn by 2023, according to a new report
Almost half (47 percent) of the total personal wealth in the UAE in 2018 was held by millionaires.
According to the latest report from Boston Consulting Group, ‘Global Wealth 2019: Reigniting Radical Growth’, personal financial wealth in the UAE grew by five percent to $400 billion between 2013 and 2018 – and is expected to grow by a further 8 percent per year to $600 billion by 2023.
A spotlight on asset allocation shows that currency and deposits (66 percent) accounted for the largest proportion of assets, with life insurance & pensions (17 percent), equities & investment funds (14 percent), and bonds (3 percent) rounding out the overall composition of assets in 2018.
Looking ahead, the allocation of assets is set to change slightly by 2023, with life insurance and pensions expected to grow the fastest with 18 percent growth p.a. compared to currency & deposits, which is forecast to grow the least at 5 percent p.a.
The cross-border share on total wealth was 31.8 percent in 2018, which is in line with the Middle Eastern and African average, yet significantly higher than the global share of 4.2 percent. With cross-border assets showing a lower growth rate than onshore assets at 6 percent p.a., the share is expected to decrease to 28.8 percent by 2023.
In terms of the Middle East, personal financial wealth bucked global trends with an overall increase of 5.7 percent in 2018, compared to a slide of more than five percent on the world stage.
The report includes insights on growing the customer base by targeting the expanding affluent segment, increasing scale and revenue by transforming client engagement models, and girding cyber defenses to protect client data and preserve client trust.
Markus Massi, managing director & senior partner at BCG Middle East, said: “While international wealth managers are making strides towards innovating in a rapidly shifting environment, Middle East wealth managers have not fully embarked on that trend. Several, even large players, are still offering standard products and services, lacking the breadth and depth of international wealth managers. Local wealth managers have to tailor their offering more to either local needs and/or a younger wealth segments. Offering a ‘me too’ will not be sufficient to benefit from the growing wealth.”