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Introduction
Over the past decade, the UAE has strategically positioned itself as the premier destination for high-net-worth individuals, earning the UAE the #1 spot globally for attracting millionaires for the past several years.
But what do most HNWIs have in common? - it’s their shared priority to minimize risk and safeguard assets—principles that significantly shape their investment strategies.
With projections suggesting a 150% increase in HNWIs in the UAE by 2040, Vault conducted a survey to better understand the perspectives of these affluent individuals regarding banks and wealth management services in the UAE.
Key Findings
1. Trust in UAE Banks and Wealth Management Firms
A staggering 62% of respondents said that they do not trust banks and wealth management companies in the UAE. Two primary factors underlie this hesitation: a lack of transparency around fees and charges, which 40% believe is driven by revenue goals rather than customer-centric motives, and a significant amount (50%) expressing concerns over prevalent scandals and fraud cases, which contribute to an overall sense of mistrust.
2. Mis-Selling Practices
The survey also highlighted the issue of mis-selling in the UAE financial sector. A notable 52% of respondents reported experiencing pressure to purchase whole of life insurance products, such as Zurich Futura and MetLife Future Protect, presented as investment opportunities. This trend appears driven by commission-based incentives for advisors, often leading to sales that prioritize advisor earnings over clients’ best interests.
3. Preference for Human Advisors Over Robo-Advisors
Despite the rise of technology-driven financial services, 90% of respondents expressed a strong preference for human advisors over robo-advisors. This finding underscores the value that HNWIs place on personalized advice and the human touch, which remains crucial even as digital solutions become more advanced.
Conclusion
Vault’s survey makes it clear: while HNWIs are drawn to the UAE for its economic stability and growth potential, trust in banks and wealth management firms remains fragile. This is where a good financial advisor can add immense value.
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