UAE: inheritance planning vital for HNWs.
I am an Analyst for the Private Wealth Management team at Datamonitor Financial. After graduating from the University of...
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Expats dominate the HNW population in the UAE and thus present a lucrative client base for wealth managers. However, to gain significant market share wealth managers must ensure that they provide appealing expat services.
Expats have been flocking to the UAE since the oil and gas boom in 1968; Datamonitor’s 2012 Global Wealth Managers Survey found that they now constitute 65% of the local HNW population. Expats have been attracted to the UAE due to low taxation, ease of immigration, and good employment prospects. To appeal to HNW expats wealth managers must be prepared to service the needs of this distinctive client group. Of particular importance to HNW expats in the UAE is inheritance planning.
Datamonitor’s 2012 Global Wealth Managers Survey forecasts that there will be an 84% increase in current demand for inheritance planning over the next two years. This service is crucial for HNW expats if they plan to invest in local assets or property in the UAE, as a discrepancy exists in Emirati law as to whether a Sharia will has to be executed on every death in the country. This means that when a male partner dies, their assets do not automatically pass to his wife or spouse but instead to his eldest son. Even if the deceased had written a will in opposition to this tradition, there is no guarantee that it will be executed in this way.
Inheritance planning is crucial to the proposition of wealth managers operating in the emirates, as existing laws mean that expats may be hesitant about investing onshore. To overcome this wealth managers should look to offer advice on inheritance law, as it will be crucial for expats planning to invest in the UAE.
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