HNWIs in the Middle East set to become richer: report

The wealth of high-net worth individuals (HNWIs) in the Middle East and Africa (MEA) region is expected to grow at six percent annually over the next five years, according to a recent Oliver Wyman and Deutsche Bank report.

The wealth of HNWIs rose to $70 trillion globally last year, but at a decelerated rate of four percent on the back of challenging equity markets, it added.

"We expect HNWI wealth to grow at a rate of 5 percent per annum over the next five years – significantly lower than growth rates in more positive market environments – reaching $91 trillion in 2023. Emerging markets will contribute 55 percent of growth with above average growth rates of six to nine percent," it said.

Significant growth rates were seen in emerging markets, which grew by seven to eight percent, while developed markets trailed behind at two to three percent.

“To realize above average growth, serving developed markets will not be sufficient. Emerging markets, including the Middle East and Africa, are the engine for growth going forward as the industry continues to face fee margin and cost pressures in developed markets,” said Mathieu Vasseux, partner and head of Financial Services (MEA) at Oliver Wyman.

Asia Pacific, Latin America, Middle East & Africa and Eastern Europe are expected to account for over half of global wealth growth until 2023, compared to one-third of stock today.

"These are the markets where wealth managers will have the greatest opportunities to expand their customer base and can significantly grow asset under management (AuM) over the coming years. APAC and Latin America show the highest expected growth rates," the report noted.

Meanwhile, after two years of steady growth in asset prices, 2018 proved more challenging, particularly in the last three months of the year, with global equity markets down nine percent (MSCI World Index).

“Markets have since rebounded in Q1 2019, buying wealth managers another period of relief before a major correction eventually hits,” the report said.