MANAMA: Entrepreneurs emerged as a key driver of this economic growth and the creation of jobs in Asia, Africa and the Middle East.
Standard Chartered Private Bank, Campden Wealth Research launched their first Asia, Africa and Middle East HNW Report titled Business Before Wealth which shows 82 per cent of Middle East business owners surveyed have already internationalised their businesses.
“Our footprint markets coincide with the fastest growing wealth pools in the world and entrepreneurs are a key driver of this economic growth and the creation of jobs in Asia, Africa and the Middle East,” Michael Benz, Global Head, Private Banking Clients, Standard Chartered Private Bank, said.
The research surveyed stakeholders in family businesses with a 2012 turnover and family net worth in excess of US$100 million, as well as stakeholders in non-family businesses with a 2012 turnover and individual net worth in excess of US$25 million.
“These emerging market entrepreneurs are fast becoming an ever-more crucial client segment. This research reveals the dynamics of business and personal wealth of this new segment of wealthy individuals, and hopefully generates thought and discussion on how private banks can adapt to serve them better,” he added.
The report showed that growing their business remains the primary and dominant goal for HNW business owners in the Middle East. The report also showed that 82 per cent of Middle East business owners surveyed have already internationalised their businesses compared to 58 per cent of Asian businesses and 42 per cent of African businesses implying the need for international banking services that support the geographic reach and growth of these businesses.
An overwhelming majority (85 per cent) of respondents are heavily involved in the daily management and financial affairs of their business. Together with the main focus on growing their business, this leaves less time for personal wealth strategies, including planning for the eventual transfer of wealth, although, in the long-term, the importance of personal wealth preservation triples from 7 per cent to 21 per cent. As a matter of fact, several of the study’s interviewees admitted the need for education when it comes to preserving the family wealth.
“Over the past 92 years of presence in the Middle East region, Standard Chartered has accumulated a deep understanding of and strong relationships with the High Net Worth Individuals (HNWIs) who drive investment, trade and the accumulation of wealth. This report highlights the preferences and behaviours of HNWIs when it comes to managing their business growth and approach to wealth management. Its findings underline the value addition that Standard Chartered as a full service bank offering Islamic and Conventional Retail, Corporate, Commercial and Private Banking services, brings to our clients. As a relationship-centric Bank, Standard Chartered strives to build deep and long term relationships with our clients with the aim of being their trusted financial advisor for growth and management of both their business and personal wealth in one continuum,” Stephen Richards Evans, Regional Head of Private Banking for Europe, Middle East, Africa and South Asia, said.
In the Middle East as well as the rest of the surveyed regions, an average of almost half the respondents lack formal plans to transfer their wealth to the next generation. Structures for wealth transfer were more likely to be found among respondents who were not part of the founding generation of the business i.e. next generation – 67 per cent of this group has a structure in place. Standard Chartered provides a comprehensive range of trust and fiduciary services through its dedicated offshore trust centers in Singapore and Guernsey to preserve wealth and facilitate generational change and transfer.