Dubai-based consultancy Insight Discovery said in its ninth edition of the Middle East Investment Panorama report that recruitment companies, credit card companies, loan agents, call centres, real estate agents, advisers from banks and independent financial advisers have the worst reputation in the UAE when it comes to professions.
Most NRI advisers do not subscribe to the observation that their profession is ‘bad’ and fewer people chose it as a career.
“Absolutely not. In my view financial advisers, in general, are held in high esteem. The main reason for the dubious perception about financial advisers is on account of a number of self-professed ‘quacks’ who claim to be financial advisers. It is important for customers to deal professionals who meet the fit and proper criteria to provide financial advice,” said Krishnan Ramachandran, chief executive officer, Barjeel Geojit Financial Services.
This was echoed by many other leading industry players who have been in the profession for years.
“It may be true in the case of other professions such as recruiters who do not need any professional qualification, but not financial advisers, who are usually former bankers or senior officials with financial services firms or consultancies. Of course, there are bad elements in all professions who gain from unethical practices,” said Binoo Nayyar, chief financial officer, TrendRiser Securities, Dubai.
NRI advisers are of the view that there has been a bit of an attrition in the overall industry and numbers have dropped, though it is not alarming enough to be a cause of concern.
“As a matter of fact, there has been a mushrooming of independent adviser firms which have emerged in the past two years,” Krishnan said.
Consolidations and partnerships can occur only when there is a robust financial oversight.
According to the Insight Discovery report, the reduced number of advisers that have survived the challenges of 2018 – in part because they have heard the complaints of the expats and have responded – are more profitable. For many, revenues have increased thanks to greater numbers of, or activity by, clients.
Reacting to the view that more transparency on fees and commissions is the key change needed for advisers, with a tougher stance by local regulators in relation to scams and unregulated firms, advisers agree that a lot needs to be done in disclosure of the financial products that are being sold to clients.
In many instances, clients are promised high returns and assured returns at the time of sale and when these are proven to be false there is a sense of pessimism amongst the clients.
“A full and fair disclosure is very pertinent when discussing investment options or choices with client,” Jojo James, chief executive officer, Fosbury Wealth Managers, and Partner of Tamim Chartered Accountants, UAE.
Expat clients generally have become more informed and demanding in this information age, which is true also specifically of NRI clients.
“This at times also leads to perceptions being formed by clients since they are bombarded with information from all sides – media channels and social media. this needs to be carefully managed and handled by the adviser,” said James.
The report also said at least 43% of financial advisers surveyed see clients’ lack of willingness to invest as a challenge.
“It’s not the lack of willingness, rather it’s the lack of the ability to convince a client on the need to invest. Every expat, including NRIs, have an objective to save and invest, it’s the question offering him or her the right investment proposition,” said Cherian Kuriakose, senior consultant with Red & Chery Consultants, Dubai.