The Middle East is certainly emerging strongly from a period of massive change. It has always been a growing international private banking hub because of the wealth held in the region and the high density of High-Net-Worth (HNW) and Ultra-High-Net-Worth (UHNW) individuals locally. In the past, the majority of that wealth found its way offshore to jurisdictions like Switzerland and the UK due to geopolitical risks and, compared to some other markets, a relatively underdeveloped local financial marketplace. However, the region has changed with concerted efforts to attract local and international money as well as private banks, wealth managers and professional services firms to support that wealth locally.

Through this period of change and growth, we now have several international free zones, notably the Dubai International Financial Centre (DIFC). It is regulated by the Dubai Financial Services Authority, has an independent regulator exclusive to the zone, its own court system, and is separate from the Emirate of Dubai’s legal system and the federal government of the UAE. Instead, it operates in English and follows the common law framework. It facilitates doing business in the region by offering companies 100% ownership without the need for local partners, a 50-year guarantee of zero taxes on corporate income and profits, and is complemented by the UAE’s network of double taxation treaties.

Foundations are one thing to come out of the free zone model. A relatively new structure, they leave control of wealth firmly in the hands of a foundation’s founder - for now and for the long term. This is because they can be put together in the free zone and thus circumvent Islamic law. They allow assets to be kept together through the generations, as opposed to splitting them up on the death of the patriarch, as would be the case in Islamic law. Other uses include philanthropic structuring as a means to keep assets private.

The growing expatriate community needs to have its needs met too. Cross-border clients who have complex taxation needs and assets held in multiple jurisdictions and currencies need specialist advice that differs from that required by local investors.

Client bases of all types also need advice and expertise that goes beyond just investing. A holistic offering that can encompass tax and legal advice, structuring specialists, as well as foundations, philanthropy, succession planning and the like, is a far more attractive offering to a client with complex, international and inter-generational needs than something solely focused on growing and maintaining wealth. One way of doing this is leveraging the ecosystems the adviser has to make for a broad offering that can meet the needs of all; a personalised service tailored to the exact needs of the client is key here.

The same can be said for the new generation of consumers, Generation Z and Millenials. They are clearly demanding to consume services digitally, but they also expect wealth management solutions that are socially connected and personalised. This is especially pertinent when it comes to the growing number of women with wealth; they have different expectations and aims around the purpose of wealth. Some wealth managers are already tailoring the offering to appeal to this cohort, and more will follow.

And although the Middle East remains a traditional culture and environment, there is strong demand for digital services – largely delivered as part of a hybrid model. The personal touch remains important.

Equipping wealth managers to deliver on the hybrid model is, thus, common sense, particularly in the context of a client base that likes to have multiple relationships and is internationally mobile. Being the best adviser in the mix in terms of the service proposition, its delivery, efficiency, depth, and breadth is the goal.

The same applies to the asset mix. As well as having relationships with more wealth managers overall, the region’s investors hold a broader array of assets, notably ESG, private markets and digital assets. This certainly marks a move away from the traditional preference to hold real estate.

The potential upside for wealth managers that can cater to all elements of this diverse and rapidly expanding client base is huge. The region is expected to remain the fourth-largest wealth hub in the world. Indeed, assets under management (AUM) in the Middle East rose 16% to US$1.2 trillion in 2022, according to BCG.

Developing the right range of products and services to meet client demand and underpinning the proposition with a robust technology set-up is key. But with numbers like that, this is something well worth doing!

About this report
One of the biggest issues that vendors and wealth managers face is getting to know each other, and that is where this report comes in. As with each of the other reports published in our ongoing WTLR series, our goal with the Middle East WealthTech Landscape Report 2023 (Middle East WTLR 2023) is to feature content from both wealth managers and vendors; we aim to start a conversation that spans both sides of the community.

While this report is a one-time showcase of this market, our online directory is available 24/7, 365 days a year, as a digital host of solution provider profiles, solution profiles, and content. Whatever your profile, this resource has been built according to the business needs of firms in the Middle East and the wider wealth management community across the world.

Our future events in Dubai will further entrench that goal by providing a forum for members of the Middle East wealth management community to come together, to hear and exchange views and thoughts. Ultimately, we hope we can help the Middle East wealth management sector make more informed decisions about technology infrastructure and stay abreast of the market’s status.

If you are a solution provider not included in this report, please reach out: office@thewealthmosaic.com

We would like to thank: Abhijeet Singh Hazare, Regional Sales Director for Middle East and Africa at Azentio Software; Bryan Henning, SVP, Head of International for Eton Solutions; Hamdan Khan, MENA Wealth and Asset Management Consulting Leader, EY; Hannah Greenwood, Senior Executive Officer at Finsbury Wealth; David Smylie, Managing Partner at GBS Private; Mohamed Seghir, CEO of HAYAH Insurance; Leena Iyar, Chief Brand Officer of Moxo; Nina Auchoybur, Managing Director - UAE at Ocorian; Tamara Kostova, CEO of Velexa; Steve D’Souza, Sales Manager at Wealth Dynamix.

Read and download the full report here.