The survey, conducted by Insight Discovery in conjunction with International Adviser, also found that 48% of advisers believe the new regulations will be “neither detrimental nor positive” for the industry, suggesting a possible lack of awareness around the new rules.
Last year, the Emirates Securities & Commodities Authority (ESCA) announced plans to introduce a new regime to regularise and more tightly control the sale of investment funds within the United Arab Emirates. A proposal was subsequently drafted and distributed to stakeholders who have since fed back to ESCA.
Daniel Rudd, head of Middle East & North Africa wholesale at HSBC Global Asset Management, suggests the possible lack of awareness demonstrated by the survey is partly due to the fact most advisers are currently licensed by the Insurance Authority. Rudd previously predicted this will change and that within the next three to five years ESCA will become the overall financial regulator in the region.
In the meantime however, Rudd encourages advisers to get to grips with the rules.
“There are two types of people in the financial services industry – those who look at regulation, decide if they are affected and, if not, ignore it, and those who look at it and decide that it is important, regardless of whether it affects them directly, and learn about it – this is the right approach,” said Rudd.
“I would encourage IFAs who want to ensure consumers are getting the best service, to understand the new regulations when they come out and to take that latter approach.”
Meanwhile, Sean Kelleher, chief executive of Dubai based advisers, Mondial, said it is not surprising few advisers have yet thoroughly looked at the regulations.
“There is no real need for advisers to read it at this point,” said Kelleher. “The discussion is not really in our court yet – it will be when it affects how we get paid – but not yet. So far, the main wrap providers, such as Friends Provident International, Skandia and Zurich, have been very good at feeding stuff through to us and testing the water. It works as more of a partnership these days and that has been apparent.
“However, it is only once we are at a final draft that I believe advisers really need to understand the regulation.”