The 2023 EY Global Wealth Research Report has revealed that 59% of wealth management investors in the Middle East are planning to move their assets to a new provider within the next three years.
This is in comparison with 45% of global investors. The survey findings highlighted investment performance as a primary motivator for both groups.
From a demographic perspective, the findings showed that 81% of millennials and 50% of Gen X investors intend to move their assets before 2026.
The service providers most likely to benefit from the shift are fintech, AI trading platforms and full-service institutions.
Increasingly complex
Nearly half of the surveyed clients perceive wealth management as having become increasingly complex in the last two years. In particular, within the MENA region, ultra-high net worth individuals (UHNWIs) and those investing through discretionary or execution-only mandates are finding wealth management harder to handle and navigate.
Sarah Sanders, EY MENA Wealth and Asset Management leader, said: “The report found that 61% of UHNWIs in the Middle East are finding wealth management more complex, compared to 32% globally. This is a significant difference that may indicate a lack of investment knowledge or financial preparedness among clients in the region.”
The report revealed that in the Middle East, 96% of respondents have switched to a more defensive investment style due to a decline of portfolio value in recent years, compared to 73% of global investors. Just under half (47%) of MENA respondents have increased their allocation to savings and/or deposits over the past two years, as a safety response.
Advice on market trends and access to product specialists remain the key priorities for MENA clients. The report also noted that ESG is gaining traction, with 58% of those surveyed seeking content on related investments and product offerings from their advisers.
Lower level of engagement with digital platforms
In addition, it found that MENA-based clients currently have a lower level of engagement with digital platforms compared to global average, and that they have a stronger inclination towards face-to-face engagement. The findings indicated that MENA investors are placing a greater emphasis on the need for strong digital capabilities than in previous EY surveys.
Hamdan Khan, EY MENA wealth and asset management consulting leader, added: “Advisers in the MENA region should consider the use or enhancement of hybrid investment models to empower clients. Wealth managers face the real-world challenge of needing to guide investors through periods of global economic and geopolitical uncertainty.
“To help navigate these challenges effectively, they should use innovative collaboration tools to support their hybrid model delivery. By combining in-person advice with virtual interactions and self-service capabilities, they can meet the evolving demand for personalised engagement. Wealth managers should consider three key strategies.
“The first of the strategies involves empowering clients through personalised and tailored engagement in every stage of the wealth-management journey. The second entails provision of frequent and flexible interactions with advisers using enhanced multi-channel models and digital collaboration tools, while the third targets improvement in client satisfaction and empowerment through interactive platforms and easy access to expert guidance.
“Clients across the globe, including those here in MENA, are placing a higher emphasis on value from wealth advisers. We know that in times of uncertainty and complexity, investors search not only for stability, defensive asset protection and sustainability through diversity but also for ever-greater value.
“Increased product deployment and education and a more thorough understanding of investors’ preferences, in addition to full transparency over fees, all have a role to play in delivering higher client satisfaction, trust and value.”
