(MENAFN- The Peninsula) Sachin Kumar |
The Peninsula
Qatar's financial wealth will experience a sturdy Compound Annual Growth Rate (CAGR) of 3.9 percent in new wealth, rising from $0.3 trillion to $0.4 trillion from 2021 - 2026, according to a new report by Boston Consulting Group (BCG).
The report titled, Global Wealth 2022: Standing Still Is Not an Option, shows equities and investment funds in Qatar make up the largest asset class at 46 percent of total personal wealth in 2021 whereas life insurance and pensions are expected to grow the fastest with a CAGR of 5.7 percent by 2026.
Whereas currency and deposits represent the second largest class at 40 percent of total personal wealth in 2021, bonds make up a mere 1 percent.
It is expected life insurance and pensions will become the third largest asset class over the next five years.
“We see the Middle East and Africa financial wealth growing year after year, including Qatar, despite a tremulous global market.
In fact, Qatar represented 4.2 percent of the Middle East and Africa's financial wealth in 2021, having grown 3.1 percent every year since 2016 to $0.3 trillion,” said Mustafa Bosca, Managing Director and Partner, BCG.
In 2021, approximately 40 percent of Qatar's wealth derived from Ultra High Net Worth (HNW) individuals who are worth more than $100m, with this expected to grow to 41 percent in 2026, whereas individuals with wealth ranging above $1m held 25 percent of Qatar's wealth in 2021 and is expected to remain the same by 2026.
Although people tend to think of net-zero as a 2050 goal, the report notes that wealth managers must act immediately to embed sustainable investing across the entire client life cycle.
The opportunity for wealth managers is clear: nearly 80 percent of clients surveyed said that they would consider increasing their crypto holdings if wealth managers offered advisory and education services.
Two-thirds of clients who sourced their crypto investment with third parties said that they did so because they didn't think their wealth managers offered such services. To determine whether crypto is right for their businesses, wealth managers must consider if, when, and how they want to participate.
On average, wealth managers that excel at customizing offers and interactions see higher rates of client satisfaction and lower rates of churn than others do.
Personalization is a complex undertaking that requires introducing new data and analytics, connecting processes across the firm's front, middle, and back offices, and changing ways of working.
In the report, BCG identifies three actions that wealth managers vying to deliver individualized service at scale can take to improve personalization: prioritize capabilities that recur across journeys; design for value and scale; and back good ideas with the right enablers.
The valuation multiples of digital wealth management firms are six or seven times as high as those of traditional wealth managers.
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