Wealth management clients looking to switch providers

MUSCAT, JAN 14 – Twenty-three per cent of wealth management clients in the Middle East are planning to move assets in the next three years, with 50 per cent of clients having already moved their assets in the past three years, according to the results of a global survey by EY, a global leader in assurance, tax, transaction and advisory services. The results showed that in comparison to clients in the Middle East, 32 per cent of global clients moved their assets in the past three years, while another 32 per cent plan to do so over the next three years. While the global sentiment has remained consistent, investors in the Middle East have shown a reduced appetite to move assets compared with just three years ago.
Sarah Sanders, MENA Wealth and Asset Management Leader, EY, says: “The wealth asset management research conducted by EY does indicate that the movement of assets in the Middle East will slow down in the upcoming years, but there is still a strong opportunity for wealth management firms to attract assets among the Middle East client base. Clients are willing to pay for financial advice, but what they value is evolving rapidly.”
“Wealth management firms need to better understand when their clients would consider moving their assets, the reasons for doing so, and the qualities they are weighing up when selecting a new provider.” Wealth management clients are more likely to reevaluate and move their assets during major life events. In the Middle East, 75 per cent of clients move their money when starting a new business, 73 per cent make the shift when buying a house, and 60 per cent of clients reconsider their asset management when inheriting or receiving money.
Clients in the Middle East are equally likely to switch wealth asset management providers for any one of six reasons: Quality and reputation, products, advisory capabilities, personal attention, pricing, or technology.
While clients may switch providers for reasons related to service capabilities, they are also looking for wealth managers that share similar values.
In the region, 53 per cent of clients are placing more importance on digital savviness, 48 per cent are looking for advisers that are proactive and attentive, and 45 per cent are selecting advisers who demonstrate sound judgement.
As clients move away from more traditional wealth management providers such as private banks and fund managers, brokerage firms and independent advisers are likely to benefit and see an increased interest in their services.
Based on the results of the EY global survey, it is expected that up to 48 per cent of Middle East clients will move to brokerage firms, while 40 per cent are likely to favour independent advisers.
In addition, clients in the Middle East will typically use over four different types of wealth providers at the same time to meet different financial needs such as family security, real estate, retirement funds, and university fees.
Sarah adds, “Wealth management clients in the region are cautious and do not want to trust one provider with all of their assets. Instead, they tend to work with institutions that have a long history of success in more stable markets abroad.
Clients that do consider investing their assets in the region are often curious to see how the local market might develop. There is therefore a great opportunity for wealth asset providers in the region to cultivate relationships with these clients and build trust over time, ultimately leading to an increase in the number of assets invested in the Middle East.”