59% of MENA investors plan to move their assets to another provider within three years

• MENA clients are more likely to re-evaluate their asset allocation than global clients
• 96% of MENA clients changed their investment behavior due to a decline in portfolio value
• 58% of MENA clients deem ESG-related investment content from their advisors important

The recently published 2023 EY Global Wealth Research Report has revealed that 59% of wealth management investors in the Middle East are planning to move their assets to a new provider within the next three years, in comparison to 45% of global investors. The survey findings highlight investment performance as a primary motivator for both groups; however, in addition, Middle East wealth management providers feel the need to prioritize the enhancement of their digital capabilities and broaden their investment options.

This drive to move assets is not generation-specific, with 81% of millennial and 50% of Gen X investors intending to move their assets before 2026. The service providers most likely to benefit from the shift are fintech, AI trading platforms and full-service institutions.

Another key outcome of the EY Global Wealth Research Report is that nearly half of the surveyed clients perceive wealth management as becoming increasingly complex in the last two years. In particular within the MENA region, ultra-high-net-worth individuals and those investing through discretionary or execution-only mandates are finding wealth management harder to handle and navigate. This perception can partially be attributed to the recent market volatility, mainly because of COVID-19, political tensions and the consequent interest rate instability.

Sarah Sanders, EY MENA Wealth and Asset Management Leader, says:

“The report found that 61% of accomplished individuals in the Middle East are finding wealth management more complex, compared to 32% globally. This is a significant difference that may indicate a lack of investment knowledge or financial preparedness among clients in the region.”

In the Middle East, 96% of respondents have also switched to a more defensive investment style due to a decline of portfolio value in recent years, compared to 73% of global investors. Furthermore, 47% of MENA participants have increased their allocation to savings and/or deposits over the past two years as a safety response.

The EY report notes that advice on market trends and access to product specialists remain the key priorities for MENA clients. In addition, as the regional wealth management landscape continues to evolve, ESG is gaining traction, with 58% of the surveyed seeking content on related investments and product offerings from their advisors.

Furthermore, the report shows that MENA-based clients currently have a lower level of engagement with digital platforms compared to global average, and they have a stronger inclination towards face-to-face engagement. However, the findings also suggest that this preference is evolving, with MENA investors placing a greater emphasis on the need for strong digital capabilities than has been seen in previous EY surveys. This trend is most likely due to the need to find solutions to the ongoing disruptions and complexities of global markets.

Hamdan Khan, EY MENA Wealth and Asset Management Consulting Leader, says:

“Advisors in the MENA region should consider the use or enhancement of hybrid investment models to empower clients. Wealth managers face the real-world challenge of needing to guide investors through periods of global economic and geopolitical uncertainty. To help navigate these challenges effectively, they should use innovative collaboration tools to support their hybrid model delivery. By combining in-person advice with virtual interactions and self-service capabilities, they can meet the evolving demand for personalized engagement. Wealth managers should consider three key strategies.”

“The first of the strategies involves empowering clients through personalized and tailored engagement, focused through every stage of the wealth management journey. The second entails provision of frequent and flexible interactions with advisors using enhanced multi-channel models and digital collaboration tools, while the third targets improvement in client satisfaction and empowerment through interactive platforms and easy access to expert guidance.”

In conclusion, Sarah says:

“Clients across the globe, including those here in MENA, are placing a higher emphasis on value from wealth advisors. We know that in times of uncertainty and complexity, investors search not only for stability, defensive asset protection and sustainability through diversity but also for ever-greater value. Increased product deployment and education and a more thorough understanding of investors’ preferences, in addition to full transparency over fees, all have a role to play in delivering higher client satisfaction, trust and value in today’s world.”

As part of its methodology, EY conducted a survey of over 2,600 clients in 27 geographies to understand how they are navigating through market complexity and managing their expectations to feel empowered and satisfied in today’s fast-changing environment. The exercise involved 46 profiled and topical questions in local languages across multiple channels to garner responses from the most diverse and inclusive panel of wealth management clients possible.

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, legal or other professional advice. Please refer to your advisors for specific advice.

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