Q4 2018 New Markets Investor

Q3 2016
Wealth Management a view from an
insider
The key fundamentals needed for wealth management firms
to flourish
As we head into the summer of 2016,
it is critical to reflect on what we have
learned from previous years and to
anticipate the challenges and opportunities
that lie ahead. Last year, investors
faced a period of diverging central bank
policies on a large-scale; plummeting oil
prices; Middle-Eastern political turmoil;
and the eventual shake-up from the
uncertainty surrounding China. Finding
the bright spots to invest in proved to be
a daunting task.
The right balance
The key condition that should and must
be satisfied today is that advisors must
understand their clients. They must understand
their needs and be able to adapt
their value proposition to changing times
and circumstances. It always holds true
that clients seek trust and transparency
when selecting an advisor, but they also
want to justify the fees they’re paying
for the advisors services. On one front,
advances in technology - as evidenced
by the proliferation of robo-advisors and
do-it-yourself trading platforms -have
given investors lower-cost alternatives to
working with professionals. On another
front, the recent volatility has spooked
many potential investors who have difficulty
seeing the value in working with
wealth managers.
These are a couple of the issues we are
facing in this day and age and to overcome
them, we must bring more value to
the table. We can do so by providing the
client with superior service by offering
attractive alternative investments ideas
that differ from traditional asset classes.
Robo-advisors cannot source and provide
attractive real estate or private equity
deals, nor can they conduct the due diligence
necessary for such deals.
The same goes for hedge funds and other
alternative investments. Advisors can
add more value through the relationships
forged with hedge fund managers,
and gain access to high-performing
investments for their clients that are not
typically accessible to the general public,
due to certain restrictions or minimum
requirements imposed by the manager.
If we cannot offer that to our clients
then we are no different from the robots
that may be major game-changers in our
industry as we move forward into the
future. The need for tailored and specific
investment advice is gaining more and
more prominence. The more sophisticated
clients we are working with today
require an advisor who can tailor advice
to their individual needs and who understands
their needs at various stages of
their lives. They are also looking for an
advisor who can look at the entire picture
and offer a holistic wealth management
approach with solutions that extend beyond
just portfolio management.
For example, we have found that an often
overlooked need in the MENA region is
the ability to transfer wealth from generation
to generation in the most efficient
way through estate planning.
In reality more than 90 percent of the
businesses in the MENA region are
owned by families and are now just
about to enter the phase where the second
or third generation has to take over.
Statistics show that family businesses do
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New Markets Investor
not survive beyond the third generation
unless properly structured through efficient
family governance processes and
where the interaction between the family
and the business is well understood and
accepted by all family members.
We believe that estate planning is an
essential solution that every wealth
manager dealing with high net worth
individuals and families should be able
to offer. In that respect, experience and
expertise are of essence, together with a
deep knowledge of the customs and laws
.
Anticipating industry challenges ahead
utilising the simplest communication
While 2015 was an arduous year for
wealth management, the importance of
providing clients with value that goes
beyond the optimal allocation of liquid
assets has never been more apt than now
Another important factor for clients is
ease of doing business with the advisor.
Investors are more tech savvy than ever
before, and most firms have adapted their
models to the digital age. Recent
surveys show that the majority of clients
prefer to conduct most business matters
by email and want ease of access to
information.
Their busy lives call for fewer face-toface
meetings and more accessibility
through digitalisation. The challenge
facing this type of innovation is cyber
security. Therefore the proper systems
and protocols must be in place to guard
against cyber-attacks and the potential
leak of sensitive client information.
Superior client service is another major
added value in our industry and accord-