Eight in 10 wealthy UAE investors fear long-lasting effects from Covid-19, UBS says

The pandemic is increasing investors’ reliance on financial advisers, according to survey findings from the Swiss bank

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The global pandemic will permanently change investor perceptions, with 81 per cent of the UAE's wealthy individuals believing it will instill a sense of fear for a long time, according to Swiss bank UBS.

Some 77 per cent of UAE respondents to the bank's Investor Watch survey said the pandemic changed their lives forever, with the same percentage stating that they had been financially impacted by the pandemic. UAE investors revealed higher rates of reliance on advisers (87 per cent) during the pandemic than the global average (83 per cent).

“This survey shows on a global scale what we are witnessing every day here in the UAE. Local investors are reconsidering the way they invest holistically. They are looking for guidance, and we are here to help them navigate these uncertain times," said Niels Zilkens, Arabian Gulf head at UBS Global Wealth Management.

In terms of the pandemic's effect on their finances, 39 per cent of UAE respondents said they had been "somewhat" affected, while 38 per cent said they had been "severely" impacted. Just 23 per cent said that it has had no effect on their wealth.

The coronavirus pandemic will account for roughly one year of lost wealth growth, consultancy Oliver Wyman said in a June report. In its pre-Covid-19 forecast, the consultancy estimated that wealth will grow consistently at 6 per cent from 2019 onwards.

The UAE’s wealthy had an optimistic outlook about their wealth prior to Covid-19. Most wealthy investors in the UAE planned to either retain their current stock portfolios or invest more over the next six months, according to a survey published in May by UBS.

However, its latest poll found that 78 per cent were worried about not having enough saved if there was another pandemic, 78 per cent expressed fear of being a financial burden to their family if they fell sick, and 73 per cent were worried about the effect on their retirement savings.

Moreover, 81 per cent of the UAE's wealthy fear a further market decline but 71 per cent felt that market volatility created opportunities, the survey revealed.

The bank polled more than 3,750 investors across 15 markets globally, 175 of whom were from the UAE.

Millennial investors reported a higher level of impact on their finances from the pandemic, and 84 per cent said it affected how they think about money.

“A silver lining in this pandemic is that while 79 per cent of millennial investors in the UAE told us they were financially affected by Covid-19, 85 per cent also said they are highly interested in sustainable investing and want their money to have an impact," said Ali Janoudi, head of Middle East and Africa at UBS Global Wealth Management.

From a global perspective, Latin American investors were most likely to see the world changing permanently after Covid-19, followed by investors from the US. The pandemic had the smallest impact on Swiss investors, with only 56 per cent saying their way of life would change permanently, compared with a global average of 75 per cent.