GCC Wealth Management Trends: a London Perspective

19 July 2024

On Tuesday 2 July, Robert Moore, Jersey Finance’s Director – UK, hosted a breakfast roundtable at the offices of Praxis, attended by a small group of invited London-based intermediaries. Focussed on private client financial services in the Middle East, specifically the GCC, the event began with an update from An Kelles, Director – GCC at Jersey Finance, followed by an insightful roundtable discussion on trends and key themes in the region.

Dubai’s financial growth: a rising giant

An’s update on the UAE highlighted continued growth, with Dubai’s GDP growing 3.6% in 2023, securing its position as the fifth largest economy globally in terms of real GDP growth index. The finance industry is expanding and the Dubai International Finance Centre (DIFC) celebrated its 20th anniversary with 34% growth last year and the launch of DIFC Two.

Expanding horizons in Abu Dhabi

A key trend in Qatar, Oman and Kuwait is the dominance of oil in their economies, indicating a need for diversification. One example is the expansion of the tourism and hydrocarbon sectors in Qatar and Oman.

Oman’s draft personal income tax proposes a rate between 5% and 9%, leading advisers to expect a rise in Omani clients restructuring ahead of this impending law. There is debate on whether this would become a regional trend.

Discussions around the table

Attendees shared their thoughts and experiences, with a key theme being succession and the importance of experienced advisers.

Succession planning in the GCC

Advisers noted a significant difference in the appetite for succession planning among wealthy families in Abu Dhabi compared to other GCC countries. There, advisers are seeing sophisticated families and family offices increasingly open to conversations about wealth and succession planning, as well as using more local structures.

These conversations are revealing generational differences in priorities and goals. One example shared was how a next-generation family member questioned why the protector of the structure was appointed by the patriarch.

The importance of experienced advisers

UK advisers work closely with their UAE counterparts to ensure advice is tailored to clients and structures are appropriate for their wishes, rather than using off-the-shelf structures. Advisers understand that GCC clients prefer advice from UK-headquartered firms and value face-to-face meetings when advisers are in the region – a unique aspect of working with clients in the GCC.

One example shared was that of a UK provider who was reapproached by a client who had structured with a local, cheaper provider unfamiliar with the offerings provided by the UK and Jersey’s IFC. The UK provider recommended a solution that required Jersey expertise.

With the rise in new structures in the DIFC, such as Private Trust Companies (PTC) and foundations governed by DIFC laws, attendees could see potential issue for cross-border private client work, possibly increasing litigation in the UAE.

Conclusion

As financial services continue to evolve in the GCC, the role of experienced advisers becomes increasingly crucial. With growth opportunities in Dubai, Abu Dhabi, and beyond, the UK’s financial industry is poised for significant advancements. This scenario creates more opportunities for the UK, particularly the City of London, to do business within the Gulf region. Consequently, it also presents opportunities for advisers in Jersey, who are often part of the same transaction chain, client relationships, and conduit processes as those in the City of London.