Half of Middle East clients switched wealth managers in last three years, EY says

Ernst & Young finds a quarter of customers in the region get financial advice through apps, as digital options play a growing role

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Half of Middle East wealth management clients switched their financial advisers in the past three years, in comparison to 32 per cent globally, as they increasingly opt for digital options, according to the consultancy Ernst & Young.

A quarter of customers in the region currently receive financial advice through mobile apps, according to EY's Global Wealth Management Research 2020 survey of 2,000 clients in 26 countries. Over the next three years, 23 per cent of Middle East clients plan to switch providers, compared to 32 per cent globally.

“The movement of assets in the Middle East will slow down in the upcoming years, but there is still a strong opportunity for wealth management firms to attract assets among the Middle East client base,” said Sarah Sanders, Mena wealth and asset management leader at EY. “Clients are willing to pay for financial advice, but what they value is evolving rapidly.”

In the Middle East, 53 per cent of clients said they choose wealth managers based on digital savviness, 48 per cent are looking for advisers who are proactive and attentive and 45 per cent select those who they feel have sound judgment.

Customers in the region are moving away from traditional wealth management providers such as private banks and fund managers. Close to half (48 per cent) are planning to switch to brokerage firms and 40 per cent to independent advisers.

The top reasons for changing providers include: quality and reputation, products, advisory capabilities, personal attention, pricing and technology.

“The demand for digital solutions that offer 24/7 anytime, anywhere access on any device is on the rise,” Ms Sanders said. “In fact, 20 per cent of clients in the Middle East say that they would switch wealth asset management firms today for such a service.”

Nearly half (46 per cent) of clients said they highly value simple, intuitive digital processes for their investment activities, such as executing transactions, opening accounts, monitoring results, rebalancing their portfolio and learning about products and services.

“The future success of wealth management firms in the Middle East, in an increasingly high-tech sector, will be determined by their ability to keep up with the pace of change and reconfigure their digital delivery model to meet these expectations,” Ms Sanders said.

Wealth management clients are also more likely to re-evaluate and move their assets during major life events. Three quarters of clients in the region move their money when starting a new business, 73 per cent make the shift when buying a house and 60 per cent reconsider their options when inheriting or receiving money.