April 13, 2024

Middle East Investment Panorama Report Unveils Booming Wealth Management Industry in GCC

The wealth management sector in the Gulf Cooperation Council (GCC) region is experiencing substantial growth and optimism, driven by an increasing number of regulated companies and positive sentiments among industry professionals.

According to the 13th edition of the Middle East Investment Panorama (MEIP) report by financial services consultancy firm Insight Discovery, the total number of wealth management companies regulated within the GCC region soared by 22 per cent to a record 240 during 2023.

The UAE, in particular, experienced a significant surge in regulated wealth management companies, leaping by 37 per cent.

This surge underscores the optimism prevailing in the industry, fueled by a favourable regulatory environment and an increasingly knowledgeable client base. The report also highlights the importance of attracting and retaining skilled client-facing staff amidst growing competition.

Nigel Sillitoe, CEO at Insight Discovery, commented: “These hard numbers fully justify the optimism that pervades the wealth management industry in this part of the world. The key players have clear ideas of what they need to do to compete in an environment where their clients are becoming ever more knowledgeable.

In particular, these organisations recognise the importance of attracting, retaining and developing the right client-facing staff. The regulatory environment is also favourable. The rise in the number of wealth management companies is particularly encouraging. The implication is that investors across the GCC region have significantly greater choice.”

Further findings

The significant changes observed since the beginning of 2023 prompted Insight Discovery to delay the publication of the MEIP report to incorporate findings from the recent Middle East Wealth Change (MEWX) event in Dubai.

The report features spotlights on wealth management and family offices in the GCC region, along with expert commentaries on investment in alternative assets and recent changes to UAE regulations for end of service benefit (EoSB) payments.

Additionally, Insight Discovery’s regular survey of investment advisers, a key component of the MEIP report, revealed a positive outlook among respondents. Conducted in the first half of 2023, the survey showed that 53 per cent of respondents experienced business growth over the previous 12 months, with 73 per cent anticipating further expansion into early 2024.

Notably, advisers are increasingly favouring alternative asset classes, driven by factors such as improved access for retail investors and growing interest from institutional investors in private equity (PE) and venture capital (VC) opportunities within the GCC countries.

“After years of false starts, excessive hype and promises of ‘jam tomorrow if not today’, the broadly defined wealth management sector of the GCC region can look forward to a great year in 2024-25 and beyond,” added Sillitoe.

“There are many challenges that can curb the growth of wealth management – demographic changes, stagnant asset pools, cutthroat competition, attractions of rival centres and adverse regulatory decisions are some examples. What really matters is that none of these challenges are evident in Dubai, Abu Dhabi and other centres across the region. Wealth management in the GCC countries will – at some point – reach maturity: however, that is definitely not going to happen in the next 12 to 18 months.”

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