The Chartered Institute for Securities & Investment (CISI), a London-based, global provider of qualifications for a range of financial services categories, said it has seen a growing interest in its Certificate in Wealth Management among Emirati firms in recent months, which it attributes to a growing awareness on the part of advisers there of the pending change in the way non-stockbroking financial services in the UAE are to be regulated.
Mondial (Dubai), the Emirati arm of the Financial Partners advisory group, is among the firms that, in Mondial chief executive Sean Kelleher’s words, “took the chance” that CISI’s Certificate in Wealth Management is likely to emerge as SCA’s preferred advisory certification.
Kelleher was so convinced of CISI’s role on the global advisory scene that he created what he is calling the Mondial Academy, which he is intending to take beyond its current classroom, located in Mondial’s Dubai offices, imminently.
What is still unclear, however, some UAE advisers say, is how those who handle mainly life insurance-based investment products are to be regulated and licensed. At present, they note, new licences are not being issued by the Insurance Authority (IA), but it is unclear how new ones are to be obtained.
One source told International Adviser that the licensing freeze had “reduced the number of insurance licences in the Emirates by half over the preceding five years, and it is likely that this trend will continue”, since the goal is thought to be fewer, thus more easily regulated, companies.
As reported in January, the SCA, also known to some in the UAE as ESCA, is understood currently to be consulting on its role as the advisory industry’s regulator, and sources say new rules that may be implemented as soon as this year. The changeover began in 2008, following an SCA Board Decree “Concerning Financial Consultancy and Financial Analysis Regulation” which “made the SCA the body in charge of regulating and licensing of financial consultancy and financial analysis activities”, according to an SCA spokesman.
Previously, and largely until now, UAE financial institutions have been regulated by the UAE Central Bank, with which most asset management companies have been registered; the IA, with which most international life companies and intermediaries have been registered; and the Dubai Financial Services Authority, which regulates activities in the DIFC.
“Many firms in the UAE have seen the benefits of increasing the level of knowledge of their staff through the SCA qualifications-led licensing regime, and have been speaking to the CISI about other certification options for their staff,” said CISI regional head Matthew Cowan.
“[Our] Certificate in Wealth Management is one of the most popular exams in the UAE – last year more than 300 exams were taken.”
‘Going into the business’
At Mondial, Kelleher said the need to ensure his staff was properly trained ended up becoming a new venture for the company.
“We are going into the business of training,” he said. “CISI have accredited us as trainers for their exams, and although initially we started with our own staff, we are now starting to train students from other companies.”
Kelleher said he is planning to introduce the Mondial Academy to other outposts of the Financial Partners Network, located in Hong Kong, Indonesia, Singapore and Malaysia, and he is talking as well to Mumbai-based Padmakshi Financial Services.
Last month, the first Mondial Academy students took their exams, with 80% of the 20 students passing the first time around, with two more passing on the second try, Kelleher said.
“It is a risk, though,” Kelleher admitted, of Mondial’s embracing of CISI, noting that no decision had yet been made as to whether CISI will become the accepted or preferred qualifications provider for financial consultants in the UAE.
Details on the plans for SCA to become the wholesale regulator of all financial services regulation in the UAE, including the timing of the consolidation of responsibility, remain unclear to many UAE advisers.
The SCA, which is based in Abu Dhabi but has an office in Dubai, refers queries on the matter to a 14-page outline of its remit on its website, www.sca.gov.ae. However, the document does not appear to address the matter of advisers whose “advice” is centred around the choice of life insurance investment products rather than stocks and funds.
CISI’s relationship with SCA dates back to 2008, when the authority sought to create the region’s first mandatory qualifications-led licensing regime, and partnered with CISI to develop an exam based on the UAE’s Financial Rules and Regulations but tailored to the Emirati market. Last year, more than 1,500 of the exams were taken in the Emirates.
A measure of the growing alliance between CISI and the SCA may be seen in the appointment to CISI’s UAE National Advisory Council last November of Obaid Al Zaaibi, the SCA’s research adviser and director of research and development.
