One fifth of HNW wealth in GCC is managed by women

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Markaz Research

One fifth of HNW wealth in GCC is managed by women 27 - May - 2013

Kuwait Financial Centre “Markaz” has recently published a report titled “When GCC Women Invest: An Underserviced Market”. Based on the report’s proprietary calculations which takes into account the inheritance law, GCC women’s high net worth market is currently worth about $224 billion and accounts for 20.2% of the total wealth; that’s more than the Japan, where women controls 14% of the wealth. Yet the report notes that most investment products and opportunities were designed for male investors.

“Markaz” expects GCC women’s contribution to wealth to grow by 15% during the next 10 years due to several factors including the increasing labor participation of women as well as participation in business and the increasing capital spending in GCC countries.

According to the report, by 2020 women of the United Arab Emirates and Qatar are expected to see the largest growth in wealth by 27.3% and 23.3% respectively. Kuwait and Qatar have the highest women labor participation rate among GCC nationals, this coupled with a relatively liberal stance on women empowerment (nationals) is expected to contribute to a sustainable growth rate in women wealth. That been said, Saudi Arabia and the United Arab Emirates will take the lead in wealth creation of USD 10.5 Bn and USD 15.79 Bn respectively by 2020.

The report explains that low women participation rate in the first oil boom riches in GCC countries during the 1970’s was due to the  generating wealth, while women managed the house hold. Therefore, investment products were constricted to men who based on several research polling tend to be more risk takers, have higher stock turnover velocity and have more conviction in their decisions.

However, the societal picture during the new millennium has become more colorful as social dynamics evolved and women started entering the workforce. As GCC women became empowered and family dynamics changed, the idea of managing the legacy based on age and gender began to decline in popularity, ushering a new client base for money managers – GCC Women Investors.

Referring to global polls, the report highlights the high dissatisfaction level among women with various financial services, noting that 62%-73% are dissatisfied on the quality of service and the products offered to them. The issue is rampant in financial advice segment and insurance segment.

The report also captures the differences between genders when it comes to investment styles in GCC countries. Although actual investment style might differ based on education level, marital status and age, women in general tend to be more risk averse when it comes to investments, while men seek higher returns and assume higher risks.

Chart - Gender Contribution to wealth
 
 
Source: Markaz Research
 
 
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About Markaz

Kuwait Financial Centre “Markaz”, with total assets under management of over KD903 million as of March 31, 2012, was established in 1974 has become one of the leading asset management and investment banking institutions in the GCC Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997.