Jersey Finance has become the first International Finance Centre (IFC) to set up an office in Dubai.
They formally opened their new office in the Dubai International Finance Centre (DIFC) this week and launched some new research into wealth planning in the region at the same time.
The new research found that 92% of wealth advisers think that High Net Worth clients in the Gulf region are poorly prepared for the transition of wealth across generations, and that only around 6% of family businesses will make it to the third generation if current structures are not made more effective and compliant.
The report, which is entitled 'Wealth Structuring and the International Financial Centres: Perspectives from the GCC', reflects the views of over 70 wealth management industry practitioners working in the Gulf Cooperation Council (GCC) market during a thought-leadership roundtable held in September 2018 in Dubai.
Pictured: The Dubai office opened on 12 November.
With an estimated US$1 trillion of wealth set to transition between families and generations in the Middle East during the next decade, the report highlights the opportunities that await HNW investors and wealth management companies in the region.
According to the research, prepared in conjunction with Hubbis, there is a growing preference from clients to professionalise the way succession planning is managed.
Commenting on the research, Richard Nunn (pictured at the launch), Head of Business Development at Jersey Finance said: “We are seeing a growing momentum amongst the older generation HNWIs who are reviewing their wealth planning strategies while they are still firmly at the helm. As this is predominantly a family and very personal wealth market, wealth transition and succession planning are still two of the most important topics that the wealth management industry is focused on in this part of the world.
"As legal and financial infrastructures continue to evolve both globally and locally, there is a stronger need for first-class IFCs and financial practitioners to provide a full suite of wealth management services to cater to the needs of GCC wealthy individuals.”
The report also shows that the use of offshore jurisdictions is highly driven by the geopolitical climate and fears of instability (25%) and succession planning (25%) followed by privacy and confidentiality (17%), asset protection (17%), tax efficiency (8%), and diversification of jurisdictions and assets (8%)
The research indicates that regional markets believe their confidentiality will be best safeguarded in those IFCs which are known to maintain their reputational excellence. According to the findings, HNWI clients in the Middle East understand that the selection of IFC is critical, with reputation being the most important factor. As such, there is a clear trend towards Tier 1 IFCs that are noted for their expertise, regulatory robustness and transparency.
Mr Nunn added: “In this context, our presence in the Dubai International Finance Centre presents a big opportunity as it boasts a dynamic, and integrated business environment. Jersey has a long and solid history in the region and, amidst increasing local and global regulation and compliance requirements, has been successful at promoting its credibility as an IFC of excellence.
"As such, we are very proud to become the only IFC in the DIFC, a testament to our commitment to the region and a strong endorsement to the wealth creation dynamics here. The DIFC is a well-respected environment that enables Jersey firms to have a GCC domestic proposition in addition to the Jersey private wealth management solutions.”
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