How UAE’s Ultra Net Worth Women are Changing the Dynamics in the Region
UAE has been recognized as one of the top 10 wealthiest countries in the world. In the Arab world, UAE is considered one of the richest countries accounting for 36% of the total Foreign Direct Investment(FDI) inflow in 2018. In the West Asian region, UAE is ranked second with 35.5% of total FDI inflow into the UAE and 22% of total annual FDI inflows to the Middle East and Africa.
Ultra-high-net-worth individuals(UHNWI) in the UAE have investable assets of at least $30million, excluding personal assets and properties with the number of UHNWI in the UAE reaching 82,763, with a total net worth of $825 billion. According to the global property consultancy Knight Frank, the number of UHNWI in the UAE is projected to increase by 24.6% to maintain its status as the fourth largest wealth hub in the world.
The most significant rise in the number of UHNWI is likely to be seen in Asia by about a 40% increase, led by Indonesia and India. It is predicted that 24% of all UHNWI will live in Asia, as the region already includes most billionaires which accounts for 36% of the total global billionaires.
The pandemic has caused an impact on the fortunes of many individuals across the world. In the UAE specifically, there has been a decrease in the number of UHNWI by 10% in 2020. However, the decline in these numbers is not consistent across all countries.
Economic diversification has played a significant role in the number of UHNWI in the region. As the UAE continues its various diversification programs, it is expected to see continued substantial growth in the number of UHNWI and billionaires in the UAE.
UHNW Women in the UAE
In the past, it has been said that women investors were risk-averse but that is no longer the notion. The changing economic empowerment of women is most visible in the Gulf than in any other region globally. Women investors are more cautious with their investments and are rising above men in their net worth. Women are often underrepresented in public and business but they are slowly emerging in the workforce and are reckoned in education, the workplace, and social structures.
Education has played a significant role in the rise in women investors, with women outnumbering the number of men in universities in 15 of 22 Arab nations. The increase in the number of UHNW women has become part of a broader economic plan in many Arab countries including the UAE.
Women today have become a sizable economic force, comprising 13% of the wealth in the Middle East. According to the Boston Consulting Group, the next few years are considered to be the defining period for women in wealth, as they continue to increase their wealth faster than men. Wealth managers across the Middle East have personalized approaches to aid clients and have come to acknowledge that the women’s segment is a massive business opportunity.
Women’s wealth segment is in a position that is considered to be favorable to experience substantial growth in the future, estimated to be 9 percent by 2023, which emphasizes the potential in the coming years for women’s wealth. Despite the ongoing pandemic and its economic impact, future growth is still accelerating as regional wealth in women increases.
The likelihood of the pandemic creating an economic shock has led to this continued growth and there’s a probability that there will be a displacement of output before there’s a rebound of growth. When that happens, the annual growth rates will accommodate the impact, enabling growth acceleration.
Wealth managers should consider the following two crucial steps to ensure that women’s wealth is recognized and continues to grow:
- Create a culture of inclusion – when onboarding individuals, use standardized questions and establish teams to shift to a client-focused approach. Avoid looking into preconceptions about female investors, and move beyond the labels. This will help wealth managers to help women develop their wealth and understand their full potential and their significant impact on today’s economy.
- Focus on the individual – personalized approaches aid in focusing on an individual and helping them get more out of their investments. Tailor approaches to meet the financial needs of the client.
With a new wealth management model, the demands and requirements of the women investors can be met, empowering them to get control of their financial decisions. This will help them contribute prominently and more equally with men so much so that wealth would no longer be a male-dominated area.
About Xanara
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