COVID-19 has proved that digital is no longer an option. How quickly do Wealth Managers in the Middle East and Africa need to adapt to this new digital-first reality?
We are in a digital-first economy and technology continues to play a pivotal role in the investment process – both for investment managers and end investors. Adapting to a tech-centric market must be a priority for wealth managers. The use of innovative technology in financial services has been pervasive ever since fintech took over more than a decade ago. The pandemic has only accelerated this trend, as wealth managers have needed to adapt, update and innovate to cater to evolving investor needs for greater speed, sophistication and customisation. It is the duty of wealth managers to ensure the latest and most efficient digital products and services are embedded within their organisations, to meet these new demands, for a client base that is becoming more discerning than ever before.
As a Wealth Management firm, our duty is to provide our clients with the best-in-market tools and expertise to enable investors to make the most prudent investment decisions to meet their objectives. To achieve this, technology plays a critical role. By having the right products in place, we can equip our clients with the granularity of insights and depth of knowledge they need to make the right choices. This not only allows us to stay competitive today, but also to best serve the needs of future generations of investors who will be the driving force behind preserving and growing the assets of their families and businesses.
As the more digitally native gain wealth and move into more prominent positions in their business and families, what are you doing to keep them engaged with your products and services?
At Lombard Odier, we provide our investors with access to our deep expertise and market-leading counsel, leveraging more than 220 years of financial services pedigree. We understand the region well, and it has always been our top priority to engage with our clients, and inform them of all our investments and services, as well as new trends that will positively enhance their portfolios.
We are acutely aware of the major priorities in the region, whether it be the challenges that local investors are seeking to overcome, or the opportunities to which we can direct them, for more sustainable, risk-weighted long-term growth.
For example, as we have learnt from years of engaging with clients in the Middle East, investors are seeking to diversify their assets, in order to maximise new areas of wealth generation, whilst remaining prudent and managing risk. This is exactly what we have been offering in the local market in recent years. Providing our regional investors and clients with access to more diversified assets and a broader range of investment opportunities across various – and more liquid – asset classes in different geographies has been the key to our success in the region. It is how we keep our clients constantly engaged.
For investment strategies, what are the leading concerns of HNWI’s in the region at this time?
Change breeds innovation, something we have seen particularly with the rise in interest in environmental, social and governance (ESG) and sustainable investing. Sustainable finance and investment in green assets – such as green bonds or equity-related investments with a focus on climate transition or net zero carbon emissions– has risen in prominence following the pandemic.
We are seizing the opportunity to invest in a circular economy, leading our clients towards sustainable investment strategies. Increasingly, investors are considering the environmental and social impact of their investment decisions – a new model of allocating capital that targets not just growth, but sustainable growth. This new model of investing fits our core conviction in our global economy’s current shift to a circular, lean, inclusive and clean (or CLICTM) economy.
We strongly believe the region is well-placed to capitalise on this emerging trend and is differentiated compared to other markets. For many HNWIs, Islamic finance can offer a useful means of gaining access to sustainable investment strategies. Shariah principles share many values in common with sustainable investing and is aligned with several of the same social and ethical principles. There is therefore a compelling opportunity in the Middle East for investors to look to Islamic finance as a means to create a more sustainable investment portfolio. The economic, social and environmental upsides can be clearly seen.
How are regional jurisdictions developing in terms of succession planning and inheritance?
Succession planning is, and will always be, a core priority for regional investors. Regulations often differ from jurisdiction to jurisdiction, creating challenges for investors. In order to get ahead of the curve and avoid issues that can arise, institutions must find solutions early, and not after the stepping down or the demise of the family in question’s patriarch. Whilst regional jurisdictions such as the ADGM and DIFC are very efficient in managing the transfer of local assets, institutions need to adopt a personal approach in order to address different client needs and demands and assess on a case-by-case basis.
Transmission of wealth from generation to generation is a key concern of investors in the GCC countries and Lombard Odier’s platform is perfectly well equipped to address this request.
With the current growth in the market, how challenging is it to source and retain experienced wealth managers and relationship managers in the region?
Financial institutions which have been operating in the region for a long period of time usually have a well-established network within the industry, which helps and supports the recruitment process. However, as with any industry, great talent is always in demand. At Lombard Odier, we are privileged to enjoy a well-established and well-regarded brand, which attracts ambitious wealth and relationship managers from across the region. At the same time, our extensive international network means we can also draw upon expertise and talent in global markets outside the region to target and attract the very best personnel. This is a major competitive advantage and aligns with our client-centric mantra to provide the very best investment advice and service, tailored to each of our clients’ specific needs. We are also firm believers in supporting and investing in our team, and we do so by nurturing our employees, providing them with rewarding long-term career opportunities. This emphasis has resonated well in our regional recruitment strategies over the last 50 years, as we continue to grow and evolve our business. For wealth managers to be successful in the region they need to attract and retain the very best talent, and this can only be achieved by being a progressive employer and having a long-term recruitment strategy.