UAE legal overhaul could trigger adviser exodus

Pedro Gonçalves
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UAE legal overhaul could trigger adviser exodus

With up to 80% of current advisers getting ready to leave the market and life insurance companies under mounting pressure, the UAE's financial services industry is set for a complete overhaul, according to analysts.

Private equity firm Berkeley Assets said the combination of official regulatory moves and new investor trends marks the end of an era for financial advisers who have enjoyed years of profiting from high commission paid up front for sales. Stricter regulations on the way from the UAE Insurance Authority and savvy investors taking charge of their own finances may come as a double threat to insurance companies.

"The UAE Insurance Authority has made it clear it wishes to push ahead with new regulations limiting fees and commissions charged to those buying savings plans and giving better protection,"  Berkeley Assets partner Omar Jackson told local news outlet Trade Arabia.

The biggest casualties will be the financial advisers for whom years of profiting from high commission paid up front for sales is drawing to a close. Their number has halved in recent years and it could drop by another 80%"

"Hong Kong has already taken the step towards a fee-based financial advisory model, very much like we see in the UK, and this is now happening here," he noted

"The biggest casualties will be the financial advisers for whom years of profiting from high commission paid up front for sales is drawing to a close. Their number has halved in recent years and it could drop by another 80%," he added.

"We can expect to see the big global wealth management firms move in with their fee-structured advisory services."