High net worth GCC clients ill prepared for transition of wealth

Pedro Gonçalves
clock • 3 min read

High Net Worth clients in the Gulf region are poorly prepared and inadequately structured for the transition of wealth across generations, according to a survey from Jersey Finance.

The survey, launched at Jersey Finance’s new office in the Dubai International Finance Centre (DIFC), revealed that 92% of respondents admitted seeing challenges in wealth transition in the region.

The report, entitled “Wealth Structuring and the International Financial Centres: Perspectives from the GCC”, shows that only 6% of family businesses will make it to the third generation if current structures are not made more effective and compliant.

“We are seeing a growing momentum amongst the older generation HNWIs who are reviewing their wealth planning strategies while they are still firmly at the helm. As this is predominantly a family and very personal wealth market, wealth transition and succession planning are still two of the most important topics that the wealth management industry is focused on in this part of the world,” Richard Nunn, head of business development at Jersey Finance said in a statement.

“As legal and financial infrastructures continue to evolve both globally and locally, there is a stronger need for first-class IFCs and financial practitioners to provide a full suite of wealth management services to cater to the needs of GCC wealthy individuals,” he added.

With an estimated $1trn of wealth set to transition between families and generations in the Middle East during the next decade, the report highlights the opportunities that await HNW investors and wealth management companies in the region as clients in the Gulf require expert guidance in terms of both structures and product.

The report reflects the views of over 70 wealth management industry practitioners working in the GCC market during a thought-leadership roundtable held in September 2018 in Dubai.

Jersey Finance hits a new milestone
The white paper additionally explores the future role of wealth structuring and IFCs in the GCC region, as the world faces increased global regulation coupled with growing demands for financial and wealth compliance. In this context, Jersey Finance invites HNWIs and wealth managers to stress-test structures and analyse their quality, as well as the level of professionalism and reputational status of the IFCs in which they are housed.

Jersey Finance has formally opened their new office in the Dubai International Finance Centre (DIFC) this week, becoming the only IFC with a presence in it .

“In this context, our presence in the Dubai International Finance Centre presents a big opportunity as it boasts a dynamic, and integrated business environment. Jersey has a long and solid history in the region and, amidst increasing local and global regulation and compliance requirements, has been successful at promoting its credibility as an IFC of excellence.

“As such, we are very proud to become the only IFC in the DIFC, a testament to our commitment to the region and a strong endorsement to the wealth creation dynamics here. The DIFC is a well-respected environment that enables Jersey firms to have a GCC domestic proposition in addition to the Jersey private wealth management solutions,” Nunn (pictured) said during the office launch ceremony at the Ritz Carlton in the DIFC.

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