The Middle Eastern Wealth Management Industry: Boon or Bust?
Middle East Institute Working Paper 2012
25 Pages Posted: 13 Aug 2012 Last revised: 18 May 2014
Date Written: August 12, 2012
Abstract
The wealth management industry in the Middle East and North Africa (MENA) represents a roughly $800 billion opportunity. Yet, tapping this opportunity will require new strategies by the wirehouses looking to penetrate into this market. In this paper, we argue that Middle-Eastern policymakers and bankers will need to develop an indigenous wealth management industry which keeps the super-wealthy’s investments at home. Developing a local national wealth management industry requires letting in foreign competition, changing banking and securities laws, and growing local companies whose share are worth buying. We show why Turkey has succeeded in growing a nationally and internationally competitive wealth management industry – whereas Saudi Arabia’s remains less than ideal. We also describe how policymakers can help brings the billions abroad home by making business easier, reforming banking and securities law, and forcing local banks to become more efficient. We also describe how foreign wealth management firms can increase their assets under management in the region. These multi-trillion dollar mammoths should use their negotiating power to open MENA markets and grow local multi-millionaires.
Keywords: wealth management, private banking, Middle East
JEL Classification: G21, F23
Suggested Citation: Suggested Citation
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