Around a quarter of wealth management clients in the Middle East are planning to move assets in the next three years, with 50% of clients having already moved their assets in the past three years, according to a global survey prepared by Ernst & Young (EY).
A quarter of customers in the region currently receive financial advice through mobile apps, according to EY's Global Wealth Management Research 2020 survey of 2,000 clients in 26 countries. Over the next three years, 23% of Middle East clients plan to switch providers, compared to 32% globally.
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.
There is still a strong opportunity for wealth management firms to attract assets among the Middle East client base"
"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," Sarah Sanders, MENA wealth and asset management leader at EY, said. "Clients are willing to pay for financial advice, but what they value is evolving rapidly."
EY explained that wealth management clients are more likely to reevaluate and move their assets during major life events. In the Middle East, 75% of clients move their money when starting a new business, 73% make the shift when buying a house, and 60% of clients reconsider their asset management when inheriting or receiving money.
"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," Sanders added.
Customers in the region are moving away from traditional wealth management providers such as private banks and fund managers. Close to half (48%) are planning to switch to brokerage firms and 40% to independent advisers.
The top reasons for changing providers include: quality and reputation, products, advisory capabilities, personal attention, pricing and technology.
"The demand for digital solutions that offer 24/7 anytime, anywhere access on any device is on the rise," Ms Sanders said. "In fact, 20 per cent of clients in the Middle East say that they would switch wealth asset management firms today for such a service."
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.