Fortress Investments, a leading investment firm operating in the Middle East, has underlined the need for more prudent wealth management strategies in the UAE, to remain on par with global practices, where a more scientific and professional approach is followed in managing wealth.

This call was made in the light of the latest report issued by Boston Consulting Group (BCG) which reveals that the UAE ranks 12th globally in the proportion of millionaire households, with 3.3 per cent holding private wealth of at least $1 million.

Hamed Mokhtar, Managing Director at Fortress Investments, says: “On a regional level, the report reveals that private financial wealth grew by 11.6 per cent to reach $5.2 trillion in 2013. This poses lots of challenges for high-net-worth individuals (HNWIs) in maintaining their wealth or growing it further with the least possible risk.”

The report estimates that private wealth in the region will reach $7.2 trillion by the end of 2018, approximately a 3.6 per cent share of total global wealth.

“The $7.2 trillion projected wealth needs the consultancy of wealth management companies in financial planning, investment portfolio management and other essential financial services,” he said. “It is high time that HNWIs sought advice from specialists on a consistent basis to manage their investments, be it equities, bonds or even cash and deposits.”

Mokhtar said: “There is a strong need for wealth managers and financial planners who can develop wealth management strategies. Some clients are under the mistaken belief that their wealth be very high to use the services of wealth management experts. This isn’t the case.”

Private wealth management services delivered to high-net-worth investors  include advice on the use of various estate planning vehicles, business-succession or stock-option planning, and occasional use of hedging derivatives for large blocks of stock.

“With the rise in the number of affluent investors in recent years, there has been an increasing demand for sophisticated financial solutions, including the Gulf,” added Mokhtar.

Wealth management can be provided by large corporate entities, independent financial advisers or multi-licensed portfolio managers who design services to focus on high-net-worth clients.

Mokhtar concluded: “With the growing size of private wealth in the Gulf, maximizing the returns on this wealth is today’s most pressing need and challenge. This has triggered fierce competition among wealth management firms to offer best packages to their clients.”

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