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Wealth in the UAE: HNW Investors

Wealth in the UAE: HNW Investors


The resident population in the UAE is predominantly comprised of expats. Reflecting this, expats also constitute a noteworthy 75.6% of the local HNW population – which has considerable implications when it comes to investors’ product and service demand. With strong demand for all planning services, being able to offer a holistic service proposition is a must in the UAE. Emirati HNW individuals typically come from either an entrepreneurial background or have sourced their wealth through earned income. The leading generator of wealth is oil, gas, and mining followed by property and real estate.

Key Findings

  • Advisory mandates are the preferred type of asset management among UAE investors, followed by discretionary services. Looking forward, the already strong demand for advisory mandates will continue to increase.
  • The desire to gain access to more sophisticated investment products only available through professionals and the complexity of their portfolios are the leading reasons Emirati HNW individuals seek professional advice.
  • Those seeking to self-direct are largely motivated by the desire to retain exclusive control over at least some of their portfolio and to avoid management fees.
  • The UAE HNW portfolio is balanced, with bonds and property accounting for the largest share of allocation followed by equities. Demand for all asset classes is expected to increase, with the exception of property investments.

Verdict Financial’s “Wealth in the UAE: HNW Investors” analyzes the investing preferences and portfolio allocation of Emirati HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

Specifically the report:
  • Profiles the average Emirati HNW investor in terms of their demographics and analyzes the expat opportunity.
  • Analyzes which wealth management mandates are preferred among Emirati HNW investors and how demand will change in the future.
  • Examines the allocation of Emirati HNW investors’ portfolios into different asset classes and how this is expected to develop.
  • Analyzes product and service demand among Emirati HNW investors.
Reasons To Buy
  • Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
  • Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ drivers for seeking investment advice vs self-directing.
  • Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.
  • Develop your service proposition to match the service and product demand expressed by Emirati HNW investors and react proactively to the forecasted change in demand.

HNW individuals are typically expats and have sourced their wealth either through earned income or entrepreneurship
Key findings
Critical success factors
The mining, oil, and gas sector is the leading source of UAE HNW wealth
Professionals are the leading demographic segment
Many HNW investors have built their fortunes through oil, mining, and gas
Expats form the majority of the local HNW population
Expats constitute 75.6% of the local HNW population
Fear of insufficient control over their investments motivates investors to keep their wealth in their country of residence
India is the largest feeder country for HNW expats
Advisory mandates dominate the UAE investment mandate landscape
Wealth managers should highlight their specialist expertise
The largest proportion of HNW wealth is in advisory mandates
Demand is strongest for advisory mandates
Advisory mandates will remain the favored asset management mandate
Emirati HNW investors who self-direct want to have control over some of their portfolio
Bonds and commodities are the leading asset classes among UAE investors
Equities constitute a fifth of HNW investors' managed wealth
Bond investments are forecast to increase amid an uncertain environment
Cash and near-cash allocation is below the global average
Property constitutes 27% of the typical HNW portfolio
Alternatives constitute 3% of the typical HNW portfolio
Commodities constitute 6% of the portfolio
Demand for planning services is high in the UAE
The high proportion of expats drives demand for planning services
Tax planning demand is high among the UAE's diverse HNW community
While the UAE's tax system is straightforward, expats often have different tax planning needs
Repatriation brings particular challenges
Demand for tax planning will remain strong
Abbreviations and acronyms
Liquid assets
Verdict Financial's 2015 Global Wealth Managers Survey
Verdict Financial's 2014 Global Wealth Managers Survey
Exchange rates
Further reading
About Verdict Financial
List of Figures
Figure 1: The largest segment of HNW expats have gathered their wealth through earned income
Figure 2: Mining, oil, and gas is the largest source of resident UAE wealth
Figure 3: The majority of resident HNW individuals are expats
Figure 4: Many expats keep their wealth in the UAE out of fear they will have insufficient control over their investments in their country of origin
Figure 5: NRIs account for the majority of UAE HNW expats
Figure 6: Welch & Ellis targets UK expats residing in Dubai
Figure 7: UAE investors expect to gain access to more sophisticated investments through professional advisors
Figure 8: Nearly two thirds of UAE portfolios are under advisory mandates
Figure 9: Reflecting mandate allocation, advisory mandates are the most sought after
Figure 10: All wealth managers predict growth in demand for advisory asset management
Figure 11: Self-directing clients want to retain control of part of their investment portfolio
Figure 12: Investors will increase their weighting into equities
Figure 13: Allocation into equities is below the global average
Figure 14: Capital appreciation is the leading driver for equity investments
Figure 15: The popularity of sukuk explains the high allocation into bonds
Figure 16: Amid uncertainty, predictability of returns drives bond investments
Figure 17: Over half of cash investments are in foreign currency deposits
Figure 18: Risk aversion is the key driver of cash and cash fund investment
Figure 19: UAE HNW investors prefer to hold their investment property directly
Figure 20: Demand for property is expected to remain steady
Figure 21: Alternative investments are almost exclusively held through funds
Figure 22: Current returns motivate investments into alternatives
Figure 23: Allocation into commodities is in line with the global average
Figure 24: Gold Edge is designed for individuals who want to invest in gold
Figure 25: Asset diversification will drive the increased demand for commodities
Figure 26: UAE demand for all planning services exceeds the global average
Figure 27: Financial planning remains highly sought after, driven by expat demand
Figure 28: Demand for tax planning is particularly strong
Figure 29: The expat-heavy HNW population will increasingly seek out for tax advice

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