The survey, which interviewed 250 financial advisers in the region, notes that the six Gulf Cooperation Council countries “continue to be among the fastest growing in the world” and it predicts that, as recovery from the financial crisis of 2008-10 increases, “more wealth than ever before is flowing to the region.”
The report added that nothing was likely to interfere with this economic growth, provided that oil prices remain stable.
The region had overcome last year’s challenges, the report also noted, when the outlook for advisers was clouded by regulatory uncertainty in various GCC countries over the UK’s Retail Distribution Review regime. However, the report argues that the RDR has turned out to be “a blessing rather than a curse.”
Insight Discovery chief executive Nigel Sillitoe added: “Given that the overwhelming majority of the clients whom the advisers serve come from the UK (or South Asia), advisers who are willing to embrace change and look at offering a fee-based alternative have a clear competitive advantage relative to those who cannot.”
Sillitoe also predicted that the new Qatar Central Bank Law would promote transparency and that it was “inevitable” that this would be the first of many disclosure regulations in GCC countries which, he said, “can only be positive for consumers and advisers who are willing to change their business model.”
The increased importance placed on transparency and accountability is reflected in the report by a backing by the majority of respondents – 88% – for an authorised association promoting financial advice in the region, akin to Hong Kong’s Independent Financial Advisors Association (IFAA).
Key findings of the MEIP report include:
- 44% of respondents were more bullish about the equity markets of Sub-Saharan Africa
- Strong preferences were expressed for interacting with international life companies through on-the-ground sales support, with websites, events and conference calls
- There are significant opportunities for international asset management companies to develop business with first time users – with one fifth of advisers not currently using the products of international asset management companies and one quarter not using the products of international life companies.
- Referrals from existing clients were voted the best method of securing new business; telemarketing was second, with PR/Advertising and family/friends next in line. Only 15% identified with social media as their way of securing new clients and business leads.
- In the year ahead, 52% of advisers in the Middle East will increase their exposure to Global Developed Markets; 48% are looking to increase their exposure to GCC equities; 47% are looking to increase their exposure in Global Emerging Markets
- In the year ahead, 29% of advisers in the region are looking to reduce their exposure to Gold while 22% are looking at reducing their exposure to single strategy hedge funds.