The wealth of UAE is projected to reach $1.3 trillion by the year 2027, says report.

The wealth of UAE is projected to reach $1.3 trillion by the year 2027, says report.

In 2022, equities and investment funds remained the primary asset class in the UAE, comprising 58 percent of total personal wealth, according to a report.

A new report anticipates robust financial growth in the UAE, with a projected Compound Annual Growth Rate (CAGR) of 5.5 percent in new wealth.

The Boston Consulting Group’s (BCG) ‘Global Wealth Report 2023: Resetting the Course’ predicts that the nation’s wealth will increase from $1 trillion to $1.3 trillion between 2022 and 2027.

Equities and investment funds continued to dominate the UAE’s asset landscape in 2022, making up 58 percent of total personal wealth.

However, bonds are expected to experience the fastest growth, with a CAGR of 8.4 percent from 2022 to 2027, while life insurance and pensions are projected to become the third-largest asset class by 2027.

“This remarkable growth reflects the compelling value proposition the country has developed for high-net-worth individuals (HNWIs),” noted Mohammad Khan, Managing Director and Partner at BCG, highlighting the UAE’s financial progress.

UAE Ultra-High Net Worth individuals contributed over $100 million in 2022

The report also highlighted the significant contribution of Ultra-High Net Worth (UHNW) individuals, valued at over $100 million, who represented approximately 25 percent of the UAE’s financial wealth in 2022. This trend is expected to continue through 2027.

Meanwhile, individuals with wealth ranging from $1 million to $20 million held 32 percent of the UAE’s wealth in 2022, and this is projected to increase to 34 percent by 2027.

“Not only do they drive innovation and investment in the region, but they also underpin its sustained growth,” emphasized Lukasz Rey, Managing Director and Partner at BCG, underscoring the role of HNWIs in the UAE’s economic success.

The report also revealed that the UAE’s real assets and liabilities grew by an annual rate of 7.5 percent from 2017 to 2022, reaching $1.9 trillion. These assets are expected to grow by 6.9 percent per year, reaching $2.6 trillion by 2027.

This balanced growth indicates a nation with confidence in taking calculated risks, which could potentially enhance overall economic growth.

The report also offers insights into wealth management, outlining eight initiatives to achieve sustainable profitability in the sector.

These initiatives include scalable client acquisition, private-market offerings, a focus on fixed-income products, and the integration of generative artificial intelligence (GenAI) in financial advice.

On the cost side, strategies encompass end-to-end (E2E) process reviews, informed outsourcing decisions, utilization of third-party technology, and simplification of products and services to streamline operations and meet diverse client needs.

“To ensure long-term profitability in wealth management, strategic adoption of initiatives such as scalable client acquisition, unique private-market offerings, and the integration of GenAI in financial advice can revolutionize revenue generation,” added Khan.

Publish Date: 12 Sep 2023


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