Wealth managers should target the Middle East, according to a report by WealthInsight, but there is a lack of Sharia-compliant products.
According to the six-page report, the number of Middle Eastern millionaires is expected to grow at a rate of 4.1 per cent between 2015 and 2019, and it forecasts there will be 226,809 in four years’ time.
The millionaire population in the Gulf region grew by a compound annual growth rate of 8.1 per cent from 136,195 high-net worth individuals in 2010 to 185,816 in 2014.
Roselyn Lekdee, an analyst at WealthInsight, said the high-net worth population was growing fastest in Qatar and Bahrain.
She said: “Several factors support fast-growing numbers of HNWIs in Bahrain and Qatar, but the most obvious influential reason is the size of their economies.
“Being smaller and less-developed markets, Bahrain and Qatar stand a greater chance for growth than matured markets such as the United Arab Emirates and Saudi Arabia.
“When the market is new, there are fewer players and less competition, which in some cases can enhance a greater chance for the SMEs to use first-mover advantage strategy – generating wealth and hence creating more millionaires.”
But Dr Lekdee warned that there was a gap in the market for Sharia-compliant products in wealth management services.
Clayton Cumming, a partner with Glasgow-based Advice and Wealth Management Solutions, said: “Sharia finance is a specialised area and I know there are a number of providers on the market.
“I think advisers will know the basics of it, but whether they know it in great detail, I don’t know.”