VIJAY SHAH via ALICE HAINE/The National
Wealth managers and investors working with high net worth (HNW) companies and individuals are increasingly being urged to explore the Middle East and Africa (MEA) region as a way of discovering new opportunities and proofing themselves against a future economic downtown in traditional European and North American markets, a new report says, according to an article published in the UAE’s The National.
The “Out of the pit stop – into the fast lane” report, a study co-produced by global consultancy Oliver Wyman and German international investment bank Deutsche Bank, described the MEA area as an ‘engine of growth’, with a rapidly growing wealth base and middle class, with private HNW wealth there expected to grow by six per cent annually until the year 2023, giving wealth managers the greatest opportunities to expand client bases and assets under their management, The National writes. The study is now into its fourth year of publication.
The growth of well-off MEA residents, powered by an increasing new generation of lucrative and regionally/globally focussed businesses, especially in Africa, is shooting up rapidly. The number of HNW individuals, those who can set aside more than USD $1 million of liquid assets for investment, is expected to outpace developed countries until 2023, at eight per cent versus four per cent annually, with Asia Pacific, Latin America, MEA and Eastern Europe set to account for over half of global wealth growth over the next five years, compared to a third today. The strongest growth rates were seen in developing countries at seven to eight per cent versus developed markets at two to three per cent.
“To realise above average growth, serving developed markets will not be sufficient. Emerging markets including the Middle East and Africa, are the engine for growth going forward as the industry continues to face fee margin and cost pressures in developed markets,” said Mathieu Vasseux, partner and head of financial services (MEA) at Oliver Wyman.
“These are the markets where wealth managers will have the greatest opportunities to expand their client base and significantly grow assets under management over the coming years,” the study said.
Apart from encouraging HNW investment vehicles to pay more attention to emerging markets such as the MEA region, the report also urged them to re-evaluate and simplify their operating models to protect against market impacts such as recessions. Other tips were to streamline front-office efficiency projects, including reducing paperwork; and automate or digitise processes for client ‘onboarding’ (acquiring and settling in new HNW clients), and also processes for fraud detection, anti-money laundering, and customer relations.
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“Middle East and Africa ‘the engine for growth’ for global wealth managers” –
Alice Haine, The National (26 May 2019) https://www.thenational.ae/business/money/middle-east-and-africa-the-engine-for-growth-for-global-wealth-managers-1.866333?fbclid=IwAR3j8millJD1GDkr2u79m-dWP2ajtc2hI_2fJXwMufhRiYhe6GF_eDI-858