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Wealth in the UAE: HNW Customers

Wealth in the UAE: HNW Customers

Summary

Wealth in the UAE: HNW Customers analyzes the profile of HNW individuals in the UAE, from their investments to product demand to source of wealth. This report is based on our 2014 Global Wealth Managers Survey. The results of the survey are accompanied by best-practice case studies on how to target local HNW clients where applicable.

Synopsis

  • Understand the major sources of HNW wealth in the UAE and the industries from which it has been amassed.
  • Interpret the investment portfolios of HNW individuals in the UAE through detailed asset allocation analysis.
  • Evaluate product and service demand among HNW individuals in the UAE, from discretionary asset management to art advisory and philanthropy services.
  • Analyze the best methods to capture new HNW clients and how best to maintain communication during the client relationship.
Reasons To Buy
  • How do HNW individuals in the UAE amass their wealth?
  • What investments make up an average HNW investment portfolio in the UAE?
  • Which wealth management products and services are in demand in the UAE?
  • How often do local wealth managers contact their clients through email, social media, or face-to-face meetings?
  • How do HNW individuals in the UAE compare to their global peers?
Key Highlights

Wealth in the UAE is mostly derived from family business owners and earned income. In addition, expats represent a very significant 78% of the UAE HNW population, and thus are a key market segment for the country's wealth managers.

Property and bond holdings account for the largest share of portfolio holdings. The share of bonds is due to the popularity of Sharia-compliant sukuk products. In the next two years, equities will see the biggest increase in demand, followed by cash holdings.

UAE HNW investors prefer to have some control over their assets, with advisory asset mandates dominating the market. However, in the next two years it is forecast that advisory asset mandates will increase in demand, with discretionary asset management and execution-only asset management experiencing smaller growth.


  • Introduction
    • Wealth in the UAE: HNW Customers is part of a series
    • The majority of data is drawn from our 2014 Global Wealth Managers Survey
  • Profiling the UAE HNW Consumer
    • Family business is the greatest source of wealth
    • Construction and manufacturing are important sectors for wealth accumulation
    • Expats represent 77.7% of the UAE HNW population
      • Wealth management is by necessity geared towards expat needs
      • Economic factors drive HNW individuals to the UAE
      • Visas are designed to encourage immigration
      • India is the largest feeder country for HNW expats
  • Understanding Asset Allocation Trends Among UAE HNW Individuals
    • Property, bonds, and cash investments dominate the HNW portfolio
      • A tendency towards cash can be problematic for wealth managers
      • Equity constitutes a small proportion of the average HNW portfolio
      • Equities are the most popular asset to hold in funds, with most assets held directly
      • In the next two years, equities are expected to see the strongest increase in demand
  • Product and Service Demand Among UAE HNW Individuals
    • Asset management services
      • UAE HNW individuals prefer to maintain a degree of control over their investments
      • Over the next two years, advisory asset management will see the greatest increase in demand
    • Planning services
      • Wealth managers must offer financial planning advice to attract HNW individuals
      • Demand for financial planning advice will increase dramatically
      • Pension planning is not well served in other parts of the market
    • Credit products
      • Providing portfolio leverage is critical for wealth managers in the UAE
      • Demand for mortgages and loans will surge, providing a potentially lucrative income stream for wealth managers
    • Niche services
      • Providers offering art advice will differentiate themselves
      • No demand changes for niche services are expected
    • Insurance
      • HNW individuals are interested in life insurance products
  • Customer Acquisition and Communication
    • Wealth managers should leverage events to target investors
      • A relationship manager's contacts and client referrals are crucial to the onboarding of clients
    • Client communication
      • Face-to-face meetings typically take place once a month
      • Many wealth managers communicate remotely with their clients at least once a week
      • The majority of wealth managers do not have a social media strategy in place
      • Company policy tends to restrict wealth managers from using social media
      • The UAE lags behind when it comes to mobile offerings
      • HSBC piloted its wealth management advisor tablet app in the UAE
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • Affluent
      • HNW
      • Ijarah
      • Liquid assets
      • Mass affluent
      • Murabaha
      • Sukuk
    • Methodology
      • Verdict Financial's 2014 Global Wealth Managers Survey
      • Verdict Financial's 2013 Global Wealth Managers Survey
    • Bibliography
    • Further reading

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