International Adviser covers a wide range of areas and jurisdictions from the UK, Hong Kong, Singapore, Spain, Portugal and South Africa.
But one region that has attracted the attention of many over the last year is the UAE.
The Dubai International Financial Centre (DIFC) has become one of the most in-demand financial centres in the world for wealth and asset managers. The DIFC has attracted several notable financial giants over the last 12 months and the total number of wealth and asset management companies in the centre has increased to over 300.
The wealth and asset management firms in the DIFC represent an industry size of $450bn (£360bn, €412bn), and, as at the end of 2022, more than 150 funds were domiciled in the centre.
But the firms are not just global businesses with massive presences in other jurisdictions – UK advice giants like St James’ Place (SJP) and Progeny, following its acquisition of The Fry Group, are also becoming attracted to the UAE via the DIFC.
The DIFC has taken the unacclaimed prize of being one the most prestigious highly-regulated financial centres to be a part of in the world.
Other watchdogs across the UAE are bringing in regulation to bolster the country’s native investment sector to allow the DIFC to become the home of the foreign wealth and asset manager.
As the wealth industry continues to be globalised, more UK-based firms are starting to think about the jump to the UAE – and the DIFC is the starting place for companies to look.
The UAE wealth market is going through a transition currently. Like in most jurisdictions, regulation has become the core focus. But the UAE market has massive potential to be a giant like the UK – but has a lot of catching up to do in terms of professionalism and best practice.
The excitement for firms outside of the UK is that the UAE wealth market is still lacking in competition, products and service. There are some great firms in the industry – but there can be more.
Since covid-19, there has been a rise in demand from expats moving into the UAE. It has become one of the most sought-after destinations.
In April 2023, Salmaan Jaffery, chief business development officer at DIFC Authority, said: “The $8trn of private wealth across the Middle East, Africa and south Asia region provides wealth and asset management firms with a compelling reason to establish in the UAE, specifically in the DIFC.”
For a long time, the UAE was a place where many people lived in the country for a number of years, made some money due to it being a low-tax jurisdiction and then returned to their home country.
However, times are now changing, and the UAE is a destination where many are thinking about retiring.
Progeny chief executive Neil Moles told IA that it commissioned a report on the movements of UK expats. He said that Canada, Australia and the UAE were the fastest growing regions for number of British expatriates.
The UAE government has improved golden visa schemes and introduced non-Shariah legislation for inheritance and succession planning – which has made it more attractive to become a secure wealth market.
The DIFC has also been ahead of the game on this. In August 2022, the DIFC launched a global family business and private wealth centre.
The private wealth centre provides global family-owned businesses and ultra-high net worth individuals (UHNWIs) access to a range of private wealth support services to enable legacy and succession planning.
The DIFC wants the private wealth centre helps attract family businesses and UHNWIs from the region and globally to establish a presence in Dubai.
Steps have been taken to make the UAE one of the biggest wealth markets in the future. But this will not work unless more firms from regulated and compliant jurisdictions like the UK – come into the market and help improve the practices of some in the industry.
The investment landscape can be dramatically improved – and if more clients look at staying more long-term in the UAE – products will be needed to cater for them.
It is a massive opportunity for firms who are looking to grow their operations outside of the UK. Doing business in the UAE is very different to the UK, but that should not put companies off from looking at the region.
The UAE has always been open to having new entrants into its wealth market and there have been many in the last few years.
This shows no sign of stopping.