The global financial services industry has been on a mission to protect consumers and this is no different in the UAE.
In March 2019, consultancy firm Insight Discovery launched a consumer-focused website which offers a range of information about the local financial advice industry.
The website, whichfinancialadviser.com, provides details on financial advisory firms regulated by two of the UAE’s key authorities – the Insurance Authority and the Securities and Commodities Authority – and on individual financial advisers who are both qualified members of one or more professional bodies.
It also profiles the other regulators in the UAE, such as the Dubai Financial Services Authority, and lists all their private client wealth managers.
The question is why was this needed and what does it look to achieve?
Poor experiences
Nigel Sillitoe, founder of the website and chief executive of Insight Discovery, said it was brought in to “stop consumers from using unregulated firms” because there are quite a few operating in the UAE.
“Our main reason for starting this website is that I came across a great number of friends or expats, who had very poor experiences with unregulated firms, where there is no recourse,” he said.
“So, if something goes wrong, what do you do? Nothing. At least if you get advice from a regulated firm, it is not to say it will be better advice, but in the main you should because there are far more checks.
“Also, if you are regulated by the Insurance Authority, you can only deal with certain insurance companies.
“We want to try and stop expats from dealing with unregulated firms and then having no recourse if anything went wrong.
“This will help level the playing field. The regulated firms have gone to the trouble of getting regulated and paying high fees every year to get their licence.”
Professional bodies
Sillitoe said the site was also launched to “ensure” consumers only deal with qualified advisers from regulated firms that are also a member of professional bodies like the Chartered Insurance Institute (CII) or the Chartered Institute for Securities & Investment (CISI).
He added that having five regulators in the UAE, it is “very confusing” for consumers to find out who they are, what they run and the licences available to financial advisers.
Sillitoe said that expats need make sure firms are regulated, if advisers are qualified and how they get paid.
Feedback
There has been a mixed response for the website in the region.
Sillitoe added: “The firms that are regulated love what we are doing. We are kind of outing some of the firms that aren’t regulated.
“The cost base for a regulated firm is pretty high compared to an unregulated firm where they can get a free zone licence, set up a company and be totally unregulated.
“There is a big difference having a company registered a free zone and being regulated by the IA or SCA.
“People often praise our efforts if they are regulated because they want to see the unregulated firms have their oxygen taken away to do business here.”
Profile
The website gives firms the opportunity to be profiled.
However, there is a checklist to tick off before they can be profiled:
- They need to be regulated by one of the five regulators in the UAE;
- Be part of a professional body like the CII or CISI;
- Give the website $2,500 (£1,944, €2,272) to cover costs, and fund SEO work and digital campaigns; and
- If the company is actively engaged in cold calling, they won’t be allowed to be profiled, but they will be still be listed under their relevant regulator, along with their logo and link to their website.
“People are fed up with cold calling and there are certain firms that are very active in that space and we will not profile them on our website. That is one of the criteria we lay out for profiling,” said Sillitoe.
“That is one of the reasons why we only have seven firms profiled, and hopefully more coming on now.
“We have over 30 qualified advisers profiled, which is coming on the rate of five per month. We will be at 50-60 quite quickly and we want a mix of different nationalities who meet the criteria.”
Campaign
Sillitoe also spoke about what he wants the media to do when it comes to unregulated firms.
“There should be a campaign to stop unregulated firms being quoted in the media because if you are not regulated why should you be quoted in a magazine or a newspaper,” he added.
“One way that journalists can easily check our credentials is to check our website to see if they are on there. If they are not, then they are clearly not regulated and should not be given any publicity.
“We make sure and we put in the effort to make sure we list every firm that is regulated.”
Next
What is the future for the website?
“The next country for us will be Bahrain,” said Sillitoe. “We have mapped out the country.
“We have a lot of information on the regulators and know who all of the advisers are, and we are approaching them to see if they want to be profiled.
“Then we will look at Oman, but there aren’t as many regulated firms.
“Qatar will happen naturally but there is a diplomatic standoff with the UAE. It will not put me off, but I would rather wait until there is more friendly relations.
“But it makes sense to have Qatar mapped out.
“Out of the six GCC countries, in time we can cover five of them including Kuwait. Saudi doesn’t yet allow advisory firms to be regulated.
“The bulk of firms are in the UAE, which is why it came first.”
