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Mideast urged to crackdown on unregulated schemes

DUBAI, October 6, 2015

About 87 per cent of financial advisers who were surveyed though regulators should be doing more monitoring and close down unregulated schemes and products, according to a report.
 
The sixth annual Middle Eastern Investment Panorama (MEIP), issued by market intelligence company Insight Discovery, also found that 56 per cent of the region's advisers anticipate lifting clients' allocations to global developed markets equities in the next 12 months. 
 
Nearly 48 per cent will increase allocations to emerging markets equities. The advisers also commented on what could help make mutual funds more popular, such as fund supermarkets and making fund pricing more attractive.
 
Nigel Sillitoe, chief executive officer of Insight Discovery, said: “This comprehensive survey of financial advisers in the GCC countries has found that the advisers are looking through the challenges of these interesting times - such as falling energy prices, the slowing global economy, geopolitical tensions and near-zero interest rates. 
 
“They recognise that their clients continue to need a high exposure to global equities and emerging markets.
 
“No fewer than 26 financial services companies are part of this project, which proves how important the Middle East is becoming as a financial destination for both asset management and life companies. Besides attracting companies like Zurich , Morningstar and Pioneer Investments we are delighted that both the Dubai International Financial Centre (DIFC) and Clyde & Co have contributed articles on topics important to the industry.”
 
The report also found that a majority of advisers (59 per cent) see the evolving regulatory environment as a challenge, while the views on disclosure of commissions varied very widely.
 
The asset management companies and international life companies who want to do business with the advisers need to have an on-the-ground (but not necessarily permanent) presence in the region and to be able to interact with the advisers in several ways, it said.
 
More than 80 per cent of advisers agreed with each of two propositions: costs matter a lot (with the result that ETFs and other low-cost solutions are becoming more popular); and there is a move from single asset class funds towards multi-asset class funds.
 
The offerings of asset management companies and international life companies are each used by about 85 per cent and 77 per cent of the advisers respectively.
 
Meanwhile, independent fund ratings mattered to 88 per cent of advisers, with most of them using the ratings of more than one research company, said the survey.
 
Open Architecture (the usage of the offerings of a variety of asset management companies) continues to flourish, with nearly half of advisers mainly accessing funds directly through platforms that are operated by international life companies, it added. - TradeArabia News Service



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