Middle East advisers call for action on unregulated schemes

Added 5th October 2015

Regulators in the Middle East need to do more to crack down on unregulated schemes and products, according to a new survey by market intelligence company Insight Discovery.

Middle East advisers call for action on unregulated schemes

The firm’s sixth annual Middle Eastern Investment Panorama (MEIP), released on Monday, found that close to 90% of investment advisers interviewed thought regulators should do more to monitor and close down the unregulated schemes and products.

Only 22% thought that regulatory standards were already high enough, while others thought they should be lifted to match those of other regulated professions such as accountants or lawyers.

The survey’s findings were based on responses from 200 investment advisers in the six Gulf Cooperation Council (GCC) countries - Qatar, Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates (UAE). The respondents either completed a questionnaire or, in the case of senior executives, took part in face-to-face interviews. The bulk of the responses were from the UAE.

Chief executive of Dubai-headquartered Insight Discovery, Nigel Sillitoe, said 26 financial services companies were part of the project, showing how important the Middle East is becoming as a financial destination for both asset management and life companies.

Risk favoured

In terms of investment advice, the vast bulk of respondents were upbeat about the outlook for global equities, with 56% expecting to raise client investment allocations to developed market equities in the next 12 months. Nearly as many, 48%, were looking to increase allocations to emerging market stocks.

The use of structured products also featured strongly, with 45% of advisers expecting to increase client allocations to this asset class over the next year.

Meanwhile with most of those surveyed agreeing  that costs are a key consideration, ETFs and other low-cost solutions were becoming more popular. The survey also found there was a move from single asset class funds towards multi-asset class funds.

Presence required

The advisers surveyed suggested asset management companies and international life companies who want to do business with them needed to have an on-the-ground - but not necessarily permanent - presence in the region and to be able to interact with the advisers in several ways. This finding is in line with the same survey last year.

The offerings of asset management companies and international life companies are each used by about 85% and 77% of the advisers respectively.

Walter Jopp, head of Market Management at Zurich Global MEA said it was encouraging to see the latest Middle East Investment Panorama had affirmed the company’s position as a leading insurer in the region.

”We remain committed to building on our expertise; knowledge and stability to ensure we bring truly customer centric solutions and services that help our customers protect their financial futures.

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Richard Hubbard

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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