In the Middle East, we are seeing a marked increase in the number and prominence of female private clients; affluent women who want more input and influence over their own finances and future.
This trend is certainly reflected in the recent ‘Winning Women’ research from WealthBriefing, which reveals that female wealth in the Middle East has been growing at a rate of 9% a year, with women now estimated to control 22% (approximately US$500 billion) of the region’s investments.
These women are exceptionally well educated, well-travelled and ambitious. In fact, research observes that “women in most GCC countries represent a better-educated pool of talent than men”, with females making up 65% of graduates in the region.
However, for cultural reasons, women’s workforce participation throughout the GCC remains very low. The WealthBriefing research highlights that “only 26.9% of women participate in the labour force, compared to a world average of 51.7%.” But this is set to change.
Last year, a strategic five-year plan was launched in the UAE for the Dubai Women’s Establishment with the aim of enhancing the participation of Emirati women in social, economic and political fields, as well as their influence across various sectors. In October 2017, a reshuffle of the UAE Cabinet was announced and of the six new ministers appointed, half were women. This increased the total number of female ministers to nine – nearly one third of the total cabinet. Meanwhile, countries such as Kuwait offer business networks specifically for women.
Developments are perhaps most striking in Saudi Arabia, traditionally regarded as one of the most conservative Islamic countries. Under Crown Prince Mohammed bin Salman, the nation now has ambitious plans for inward investment, modernisation and growth on the world stage. Its all-encompassing Vision 2030 plan aims for everything from increases in foreign direct investment and tourism to improvements in the health and life expectancy of its people. Among the plan’s key objectives is “to increase women’s participation in the workforce from 22% to 30%”.
Towards the end of 2017 Saudi Arabia also revealed plans to build a US$500 billion mega city, Neom. One thing that really caught the media’s attention was the promotional video shared across social media. Among other things, it shows women jogging in public spaces, playing musical instruments in a mixed ensemble, and working alongside men in scientific industries.
With completion of the first phase scheduled for 2025, it will take time for Neom to become a reality. A more immediate change is the lifting of Saudi Arabia’s long-standing ban on women drivers, which comes into effect on 24 June 2018. This headline-grabbing legislative change represents a significant breakthrough for women in a country known for its strict gender segregation rules.
So what does all of this mean for the private wealth industry?
In Saudi at least, under the kingdom’s guardianship system, a woman’s finances are still overseen by a male ‘wali’, or official guardian – typically her father, husband, brother or uncle. However, women’s rights groups in the country are now lobbying for the end of guardianship in Saudi society and we are increasingly seeing Saudi women seeking greater influence over financial and investment decisions.
In the wider region, the women of wealthy Middle Eastern families are taking control of the wealth in family companies and playing increasingly influential roles in family offices. Given that the GCC region “counts more than 5,000 family offices, encompassing more than $500bn in assets”, this is something the industry should take careful note of.
In recent years, women in the Middle East have been making powerful steps forward in business, politics and society; a trend which promises to continue indefinitely. That said, women still only own 6.8% of small-to-medium enterprises in the GCC region, and while they have been successful in securing seed funding for their business ventures, “there remains a gap between this stage and where private equity firms are willing to take a stake.”
There is clearly a significant opportunity for professional service providers able to deliver tailored services to support female entrepreneurs throughout each phase of the business cycle. Given the cultural sensitivities, having a suitably experienced all-female team to service female clients in this region could prove particularly beneficial, though this of course will not always be necessary, especially as gender segregation becomes less of an issue over time. More important perhaps is the ability to speak to these clients’ personal experiences and help them overcome persisting barriers to reach ever-greater heights.
Middle Eastern females represent a vibrant and growing client sector, and those professionals in well-regulated, reputable jurisdictions who are able to thoroughly understand and meet these clients’ specific needs and requirements will be ideally positioned to develop strong, long-lasting and mutually rewarding relationships.