Curating Independent Advice and Delivering an Enhanced Wealth Management Offering in the UAE

At the inaugural Hubbis Independent Wealth Management Forum in Dubai of March 15 a panel of experts debated the challenges and missions around delivering agnostic and holistic advice to private clients in the Middle East, whether those clients are from the region or any of the international individuals or families coming into the UAE. The overall impression was that there is greater diversity and improving standards coming from the private sector as well as from the regulators and the governments of the region, and from the bodies such as the DIFC, the ADGM and others that house existing and new operators and family office and law firms and fiduciary services, and so forth. But while great progress has been made – the region has come far in a quite short period of time – there is far more to achieve. Hubbis has distilled their comments into this short review.

Chair: Philippe Amarante, Head of Middle East, Henley & Partners

Panel Members

• Mehrez Kheir, Partner and Managing Director, Abbey Road Investment
• Joseph El Am, General Manager MENA, StashAway
• Alastair Glover, Partner - Private Wealth, Trowers & Hamlins
• Tim Searle, Founder and Chairman, Globaleye

These are some of the questions they addressed:

• What must you offer to deliver a genuinely client-first advisory offering? 
• How do you monetise advice while remaining entirely client-centric?
• How would you explain your value proposition? How can you differentiate yourself?
• Do you need an investment adviser or CIO to run a meaningful and effective boutique independent wealth management firm in the UAE?
• How do you manage risk, curate research and deliver the best asset allocation?
• What are the implications of regulatory initiatives in the UAE and more broadly in the region?
• How do you choose the right partners with which to work?

Key Insights & Observations

Value is moving centre stage in the wealth management proposition in the quest to become trusted advisor

An EAM head with very considerable experience of the region opened with the observation that the independents must strive to deliver value, and that the evolution of client centricity is more important today than ever before.

“Product in the past was always of paramount consideration, but now it is value,” he said. “Value means that we need to take a holistic view of the client and all their needs, their aspirations, for today and the future. We need to be able to bring clients the expertise they require, externally as well as from in-house, and if so, we will be seen as the trusted advisor. It is  a complex world today and clients are international or global and so too their families and assets. We must work with multiple generations and deliver a client-first offering and experience.”

Technology plays an increasing role, especially as the new wave of disruptors enter the fray, but largely for the mass affluent and lower HNW categories

A disruptor delivering a digital investment platform reported how they are offering their own form of value in terms of an easy to access array of portfolios at very reasonable entry pointy and very low ongoing fees, and with easy access and a pleasant user experience. He said this was already shaking up the region’s wealth industry, especially as private wealth and the mass affluent market expands in the Middle East, and their expectations increase.

An MFO leader observed that for the UHNW segment they focus on, human connectivity trumps technology, which is used largely for middle and back-office efficiencies and empowering advisors

Explaining that their clients are largely UNHWIs and families, another EAM head said that their proposition is very much centred on human interaction and dedicated time with each client. Not for them off-the-peg portfolios, but customised a  locations that can be adjusted with agility. Technology boosts efficiencies in the operations and management sides, and also helps free up advisors and make them more efficient. But it is the individual touch that makes their differentiation.

Complexity is everywhere and far greater sophistication is required around products, portfolios, estate structuring, life solutions and fiduciary matters

A guest added that expertise and specialisation need to be available in-house, but also supplemented where required through other authorities, lawyers, accountants, fiduciary specialists and life insurance providers and brokers.

“Complexity is everywhere, and while it is good for the lawyers, it is challenging,” he said, noting that clients and advisors must adapt planning and structures to what is a very pervasive global regulatory environment. He said clients need proper advice and solutions around estate and legacy planning, life insurance solutions, residence and citizenship matters for themselves and family members, and so forth.

The UAE and its wealth management proposition have travelled a great distance in a short period of time, but there is, quite correctly, more needed and plenty more to come…

An EAM head explained that their clients’ demands and expectations are far more comprehensive today, and that is part and parcel of the advances the UAE has made in attracting a far greater diversity of wealth to the region, and testament to the efforts the Middle East’s governments have made to boost and diversify their economies and broaden private wealth well beyond the ultra-rich.

“The UAE has come a long way in a short space of time,” a speaker reported. “Corporate tax is coming to the region, representing a major change, requiring more sophistication, more professional advice. Standards in general have improved organically have over the years, and due to regulation and due to the demand of the market.”

“There is a greater choice out there,” he continued. “And certainly all the international clients have choices to make between the UAE and major global centres, and many have had exposure to best practices in other jurisdictions. The same for wealthy clients form this region, who expect similar quality and practices in their own backyard. I feel genuinely that things are changing.”

Another expert noted that the DIFC and the ADGM were upping their games, expanding their offerings, tightening standards, opening the doors to more players and more family offices. “What the authorities and regulators and governments are trying to do is keep their wealthy families from getting on a plane and having to go to Zurich or London to get their expertise and their advisory, and instead get a proper offering here in the region. It is high time as I for one have been vocal about the dearth of advisory expertise, but there is definitely a catalyst as new firms and new offerings and innovations are coming and as the ADGM and DIFC expand and raise their propositions.”