In the dynamic landscape of wealth management, the GCC countries are witnessing a rapid evolution driven by the expanding affluent population and a surge in assets under management. As Objectway prepares to host a gathering of industry leaders in the region, we explore the key trends shaping wealth management in the GCC for 2023 and beyond.

Market Overview

The Middle East’s wealth management sector is on a trajectory of remarkable growth, with AUM soaring by 16% to reach a staggering US$1.2 trillion in 2022, according to the BCG. What’s more, the region is on the verge of a wealth boom, with Ultra-High-Net-Worth Individuals (UHNWIs) projected to surge by 24.6% in the five years leading up to 2025, as reported by Knight Frank.

Lombard Odier sheds light on the forward-thinking approach of 87% of HNWI investors in the Middle East, who believe their family businesses are aptly structured for efficient wealth transfer to the next generation. This trend, coupled with cultural liberalisation and rising educational standards, sets the stage for significant shifts in wealth dynamics, with an estimated one trillion in assets expected to be transferred to the next generation by 2030, as per the UAE Ministry of Economy.

Trends-wise, the shift towards digitisation is palpable, with a considerable percentage of wealth management clients currently receiving financial advice through mobile apps. A noteworthy trend is the preference for local wealth managers, as highlighted by Accenture’s findings that 71% of investors in the UAE and 68% in Saudi Arabia prefer relationships with regional wealth managers over international firms. In response, wealth managers are strategically investing in modern technology to build trust, emphasising the importance of a digital end-to-end trading cycle.

Looking ahead, it appears that the great majority of new wealth management clients, primarily Generation X and Millennials, are expected to further demand data-driven, hyper-personalised advice, akin to the experiences offered by tech giants. Indeed, EY’s Global Wealth Report 2023 reveals that 60% of Middle East investors plan to move their assets to a new provider within the next three years, driven by a desire for greater digital investment capabilities and a wide range of products.

Defying challenges and creating opportunities

Client loyalty therefore remains a challenge, prompting wealth managers to constantly adapt to changing regulations and embrace transparent fee structures. A hybrid model improvement enhanced digital channels and a focus on sustainable investments also rank high among the expectations voiced by clients.

Nevertheless, opportunities arise! A significant 57% of investors in the region are likely to invest in digital assets in the next 12 months, according to Accenture.

Additionally, the growing interest in sustainable and ethical investments drives wealth managers to integrate digital platforms that facilitate online portals with multiple features.

In the closing act, as the GCC wealth management sector continues its transformative journey, the convergence of technological advancements, shifting client expectations, and a focus on sustainability creates a landscape ripe with both challenges and opportunities.

The Objectway roundtable promises to be a pivotal event in shaping the blueprint for success in this dynamic environment where client satisfaction and innovation are paramount. Stay tuned!