ME investors turn to Swiss wealth managers
Geneva, February 11, 2014
More and more Middle East investors are turning to Switzerland for wealth management services, said a financial expert.
Crucial factors such as banking secrecy, diverse investment products and services have contributed to Switzerland remaining a premier offshore haven for the Middle Eastern investors, according to a leading Swiss-based asset manager specializing in the Middle Eastern region.
The Middle-East market slush with a whopping $4.5 trillion in private wealth remains an attractive growth market for the private bankers, it stated.
Saudi Arabia accounts for about 40 per cent of the total wealth pool in the GCC followed by the UAE, Kuwait and Qatar (with about a 22 per cent, 15 per cent and 12 per cent share of HNW wealth, respectively).
The product mix for asset allocation has not significantly changed since 2011, but demand for collateralized lending solutions is growing.
William Spencer, at WT Capital Management, said: “We have seen an increase in demand for wealth management solutions from Middle East region, we have had a surge in requests for custodian services and tailored structured products in 2013 and expect year on year growth in 2014."
WT Capital Management is a Swiss-based asset manager with a focus on servicing and advising sophisticated private clients with global wealth management solutions.
Independent in all aspects of business activities, the company pursues a corporate strategy based primarily on four cornerstones: A pure business model dedicated to private and investment banking, a distinct value proposition and service excellence focus, a truly open and managed open architecture product platform and a client-centric management culture, explained Spencer.
"We believe competitive pricing, enhanced return and a wider range of investments products give Swiss banking a significant edge over regional Middle Eastern banks,” he stated.
"We believe independent asset managers will continue to thrive in the Middle Eastern markets, as they are not biased or bound to any single financial institution, this enables them to coherently diversify asset allocation, reduce transactional and custody costs to increase returns for investors," said Spencer.
Given its pure business independence, it is able to source the best solutions among the leading Swiss banks and provide its clients with lower transaction fees and superior returns. It solely relies on performance generated on client portfolios. Its balance sheet is never exposed and as a result, WT Capital business model has very low-risk characteristics, he explained.
According to Spencer, the company offers custody services for private and corporate clients in Switzerland and UAE and other Gulf states in addition to offering structured product investments tailored to client specification and direct investments in equities, bonds, futures and Forex. It has access to all exchange traded and OTC derivatives markets and alternative investment solutions.
Switzerland has many traditional strengths like political and economic stability, a historical strong positioning in private banking, a high education standard and an above average client service level. These factors and an increased focus on asset management capabilities will keep Switzerland middle term in a good position to remain competitive.
According to McKinsey Global Private Banking Survey 2013, the average revenue margin rose slightly in 2011.
The Middle-East remains an attractive growth market for private banking. Inflows continue to climb, and profitability is rising. However, competition among private banks is intensifying both among onshore and offshore operators, said the report.
It said total Middle East wealth (onshore and offshore) grew to $2.2 trillion in 2012, up 18 per cent. The outlook for the region remains positive. It estimated that total High Net Worth (HNW) wealth will increase to $3.3 trillion by 2015.
According to the report, most of the assets of Middle East clients continue to be booked offshore in the traditional booking centers of Switzerland.
"New money is coming from the Middle East. They are happy to go to Switzerland as they have been doing for the last 50 years. Swiss banks are becoming more dependent on wealthy Middle East customers. Most Middle East wealth in Switzerland is held in Geneva," it stated.
The report also pointed out that while important families from the Gulf tend to do their commercial banking with banks from the region, they prefer to keep their private affairs separate and offshore.-TradeArabia News Service