Almost of all Mena-based wealth managers (96%) believe the use of technology in assessing client suitability, risk tolerance and asset allocation will expand in the next three years, Oxford Risk has found.
The behavioural finance experts surveyed advisers and wealth managers based UAE, Saudi Arabia, Bahrain, Qatar, Oman, Egypt, and Kuwait with $290bn (£220bn, €264bn) in assets under management.
It found that just 31% rate their risk assessment for clients as excellent, as most wealth managers said that services need to improve.
The survey also found strong support for the work by regulators across Mena in driving better skills and professionalism which are helping to ensure that advisers can assess what clients need driven by a more formalised assessment of their risk profiles and goals.
More than half (54%) of advisers expect the trend to increase dramatically over the next five years, while 41% expect a slight increase.
Use tech for risk
Oxford Risk is urging wealth advisers in the region to make more use of technology to provide improved services to clients based around understanding their needs through detailed profiling.
Greg B Davies, head of behavioural finance at Oxford Risk, said: “Wealth managers across Mena are focused on improving their service to clients and increasing their skills.
“It is interesting to see that just one-in-three describe the ability of wealth managers in the region to understand the suitable risk level of clients as excellent. By increasing their use of technology and algorithms to help deliver more consistent support to clients, they can avoid issues over assessments of risk tolerance and asset allocation.
“Once a specific framework for the measurement of risk tolerance, risk capacity and other relevant factors is established it can be run at scale and speed.”