The total number of wealth management companies regulated within the Gulf Cooperation Council (GCC) region soared by 22% to 240 during 2023, according to the 13th and latest edition of the Middle East Investment Panorama (MEIP) report by research consultancy Insight Discovery. 

While the number of wealth management companies regulated in the UAE leapt by 37%, outside the UAE there wasn’t much change.

External asset managers grew from 54 and 75, the number of online trading platforms from 20 to 25 as private banks increased more slowly,  from 57 to 62.

Nigel Sillitoe, the firm’s chief executive officer said: "These hard numbers fully justify the optimism that pervades the wealth management industry in this part of the world.

"The key players have clear ideas of what they need to do to compete in an environment where their clients are becoming ever more knowledgeable.

"In particular, these organisations recognise the importance of attracting, retaining and developing the right client-facing staff. The regulatory environment is also favourable.

"The rise in the number of wealth management companies is particularly encouraging. The implication is that investors across the GCC region have significantly greater choice."

Collectively, the changes that have taken place since the beginning of 2023 were so fundamental that Insight Discovery said it delayed the publication of the MEIP report so that it could incorporate findings from the recent Middle East Wealth Change (MEWX) event in Dubai.

The report includes Spotlights on wealth management and family offices in the GCC region. There are also expert commentaries on investment in alternative assets and the recent changes to the UAE’s regulations for End of Service Benefit (EoSB) payments.

Insight Discovery’s regular survey of (broadly defined) investment advisers - another feature of the MEIP report - also presented a very positive picture.

Conducted in the first half of 2023, the survey found that most respondents were upbeat. Some 53% had grown their businesses over the previous 12 months. Meanwhile 73% expected that their businesses would expand over the coming 12 months (i.e. into early 2024).

Another finding was that the advisers increasingly favoured alternative asset classes.

There are a number of reasons for this, Insight Discovery said: Retail investors have greater access. The GCC countries are being seen as increasingly attractive for inwards investment in private equity (PE) and venture capital (VC) opportunities. Institutional investors - whose AUM is growing - also have a strong bias in favour of alternative assets.

Sillitoe added: ‘After years of false starts, excessive hype and promises of “jam tomorrow if not today”, the broadly defined wealth management sector of the GCC region can look forward to a great year in 2024-25 and beyond.

"There are many challenges that can curb the growth of wealth management - demographic changes, stagnant asset pools, cutthroat competition, attractions of rival centres and adverse regulatory decisions are some examples.

"What really matters is that none of these challenges are evident in Dubai, Abu Dhabi and other centres across the region.

"Wealth management in the GCC countries will - at some point - reach maturity: however, that is definitely not going to happen in the next 12 to 18 months.

"Quantifying asset pools is still difficult. However, our research should provide some educated guesses.

To anyone who is looking beyond the boom in wealth management in this part of the world, we say: “watch this space…”