Reputation of financial advisers in the UAE deteriorates: MEIP report
The tenth edition of Middle East Investment Panorama (MEIP) was released today. The report includes findings from two separate surveys, conducted amongst both consumers and financial advisers.
The survey found that almost one in four UAE residents perceive credit card issuers to be the least trusted of all financial providers, independent financial advisers were ranked 5th in this reputation survey. With covid-19 wreaking havoc on personal finances, credit cards' high interest rates undoubtedly drove this negative sentiment.
While financial advisers occupied the same position when compared to the 2019 survey, the number of residents who thought they had a poor reputation increased from 5% to 9%.
Quite unlike the global financial crisis of 2008-09, the covid-19 pandemic was not foreseen and had its first impact on the real economy rather than in financial markets."
Second place was occupied by recruitment companies, who were considered the worst profession last year; telemarketers came third with estate agents in fourth position.
Key points from the MEIP report include:
- 71% of advisers view wealth planning as a major medium-term opportunity.
- Over 60% of advisers had grown their businesses over the preceding 12 months.
- Some 60% of advisers view the improvement of administration processes by international life companies as a top priority.
- At 27% in each case, the number of advisers who think that the new regulations that are due to be introduced by the Insurance Authority in April 2020 will be a disaster for the industry is equal to the number who think that the regulations are (very) positive.
- Following the announcement of the new Insurance Authority regulations only one eighth of CEOs are considering the sale of their businesses.
- 39% of advisers considered that expat clients were demanding more digital services.
MEIP looks in detail at what financial advisers, who collectively play a crucial role in the UAE, are thinking and doing. The key role of financial planning has been highlighted by two developments in the UAE. One is the new set of regulations of the Insurance Authority (IA) of the UAE, which are due to come into force in October this year. The other is the Dubai International Financial Centre (DIFC) and the recently launched Employee Workplace Savings (DEWS) initiative.
Nigel Sillitoe, CEO of Insight Discovery, said, "Headlines have been dominated by the covid-19 virus and, before that, the IA's new regulations. Relative to other professional groups, financial advisers have had to cope with a wave of new regulations by the authorities in the GCC countries, that have sought to improve the conduct of the advisers."
"The recently announced rules of the Insurance Authority of the UAE, which are now due to come into force in October 2020, are merely the latest example. The advisers have met the challenges, and the industry is stronger as a result," he added.
"Quite unlike the global financial crisis of 2008-09, the covid-19 pandemic was not foreseen and had its first impact on the real economy rather than in financial markets.
Sillitoe said, "On the basis of our MEIP research, we are optimistic that advisers can keep their clients engaged, especially firms who embrace digital solutions. Over a dozen leading financial services companies sponsored MEIP. The lead partners included FRS, Morningstar and SS&C Advent."
Shamoil Arsiwala Sales Director - Middle East, Morningstar, said "We are delighted to be recognised as the leading fund ratings company once again, the tenth time in as many years. Insight Discovery's latest MEIP report highlights how advisers are coping with two major challenges - new regulations and the COVID-19 virus. This is an insightful and timely report as our industry adapts to create improved investor outcomes"
Adds Frank Carr, director, Financial Risk Solutions (FRS) ‘Never before have expats needed professional financial advice than they do now. Never before have advisers and international life companies needed to industrialise their processes than they do now. We are delighted to be sponsoring the MEIP report'.
Click here to view the full MEIP report.
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