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The UK is considered one of the most respected, if not, the most respected place to obtain financial services whether you are an individual investor or an institutional investor. A necessary evolution that needed to come about from the inception of the Lloyds of London which actually started off as providing marine insurance in the late 17th century.
That evolution required the complementary development of various other professional services which included accountancy, legal, and financial education which is the reason why the UK has become a world leader in its provision.
But in an age of increasing hyperconnectivity, easier travel and liberal economies, people have better access to relevant education and are able to apply those skills in the jurisdictions that require them and have a welcoming attitude. Those jurisdictions are no longer London, New York, or a major European city. Rather it’s Dubai, Abu Dhabi, and Doha. And yet more cities in the Kingdom of Saudi Arabia (KSA) to be created as part of their eye-watering NEOM project, will only serve to attract more talent into the region.
But despite the attraction of foreign talent, it’s unlikely to provide local financial products and is also unlikely to offer robust financial regulation anytime soon. Only when we see innovation in tech and science coming out from homegrown companies in the Middle East to be worthy of being listed on an internationally reputable stock exchange also in the Middle East will we then see the necessary development of local professional services – just like the journey London took in its own development.
Until then nationals and expats will continue to rely on international financial services to offer an opportunity to plan for their financial future. They are going to need it as they benefit from a high-income and a low tax jurisdiction. A necessary compromise for a jurisdiction that doesn’t normally offer citizenship.
Despite the Middle East being an attractive destination, parts of the region remain a serious security risk for families, be it due to geopolitical conflict or the affects of climate change.
Mobility is now and will continue to be considerably more important as expats seek jurisdictions that are safe for their families, that can provide good healthcare, access to a decent education and of course the opportunity to work and set up a business. Syrians, Iraqis, Lebanese, all come to mind. But so do Pakistanis, Indians and Bangladeshi professionals living and contributing to developing their host countries but without being able to call it their state.
The second passport and residency industry has seen an explosion in growth, in 2014 the industry was worth $2 BLN (Source: Fortune.com) and in 2019 it was worth a staggering $25 BLN (Source: bbc.co.uk). As expats weigh up geopolitical and domestic challenges I think this industry is only going to become even more important.
International financial advisers need to consider their clients country of origin and passport more than ever to best advise how to protect their clients’ future. Suitable life insurance, retirement plans and cross-border tax planning will always be important, but a wealth management plan must now be tailored to meet the immediate need of a safer jurisdiction for relevant clients and their families.
You may be interested to read the following piece: https://adlestateplanning.co.uk/which-second-passport-should-i-get
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Mohammad Uz-Zaman MA DipFA PETR is an international wealth manager who holds dual accreditations across wealth management and trust planning. He advises high-net worth (HNW) individuals how best to protect their family and structure their estate for the benefit of successive generations. Mohammad is also an associate member of the Society of Trust and Estate Practitioners (STEP).
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