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Insight Discovery Leadership Roundtable

Working towards greater clarity, greater transparency and greater understanding of the consumer How will the GCC savings, investments and life insurance industry change over the next couple of years?

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INTRODUCTION

Regulation is something on which everyone involved with asset management, life insurance and the other aspects of the organised savings/ wealth management industries of the Gulf Cooperation Council (GCC) countries has an opinion. Of the 212 financial advisers who took part in Insight Nigel Sillitoe Discovery’s Middle East Investment Panorama (MEIP) earlier this year, 49% said that the changing regulatory environments of the various GCC countries represented a challenge to the development of their business. However, 47% said they regard evolving regulation as an opportunity.

Any discussion of regulation is complicated by the peculiar nature of the six GCC countries. The overall environment for financial services in general (and organised savings/ wealth management in particular) varies quite markedly from country to country. However, the factors they have in common mean it is not possible to identify a single model of regulation in the rest of the world that can be imported directly. These factors include the extremely generous social security systems, which mean that citizens of the various GCC countries do not have to make provision for their retirement, like people in other countries.

Photo by Jeffrey E. Biteng/The National

Further, the economies depend on huge numbers of expatriate workers who expect to build nest eggs in a defined period of time in the region – before returning to their home country or moving somewhere else. Expatriates generally have little commitment to investing in the local financial markets of the GCC countries. One way or another, the international asset management companies and international life companies offering their products in the region are substantially dependent on financial advisers for distribution.

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Arguably the country with the most unusual regulatory environment is the United Arab Emirates (UAE). In terms of the number of financial advisers who work there, it is by far the most important country in the region for international asset managers and international life companies looking to exploit the opportunities in organised savings/ wealth management. However, the UAE has completely separate regulatory regimes. The Dubai Financial Services Authority (DFSA) oversees offshore business that is conducted through the Dubai International Financial Centre (DIFC), insurance companies and insurance brokers are regulated by the UAE Insurance Authority and banks, asset management companies and capital market activities by the Central Bank and ESCA. Changing regulatory environments may present an opportunity but conversely they may present a threat and there is the possibility of nasty surprises. Like many observers, we were taken aback by a strongly-worded announcement, in mid-September 2012, from the Capital Markets Authority (CMA) of Saudi Arabia. The announcement makes it very difficult for financial services companies to distribute products or services in the Kingdom, unless they have secured the necessary licences and have borne the cost of establishing a physical presence in the country.

This Leadership Roundtable seeks to identify the issues that matter in terms developing the financial services industry, and the regulation of organised savings and wealth management across the region. As ever, we are enormously grateful to our partners (Amundi, Fidelity Worldwide Investment, Friends Provident International, HSBC Global Asset Management, ING Investment Management Middle East, Morningstar and Zurich International Life) for making this Roundtable possible. We are also indebted to the senior executives of the leading advisory firms for their insightful interviews, which appear towards the back of the report.

Nigel Sillitoe Chief Executive Officer, Insight Discovery

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Key findings • The low levels of life insurance density and penetration in the GCC countries reflect a number of problems. These include a lack understanding of the products available and a lack of trust of the advisers who actually deal with consumers.

• Lack of understanding – by both the financial advisers and the consumers – is a far more serious problem than ‘sharp practice ‘ by a small number of mainly unregulated advisers. In any event, there has been a significant reduction in what could be considered ‘sharp practice’ over the last five-to-10 years.

• In the UAE, and some other GCC countries, it is not clear exactly which regulator is responsible for what.

• Regulations are changing in ways that are not predictable.

• There is little co-ordination between the regulators in different countries and, in some instances, within the same country.

• International life companies and asset managers have a key role to play in collaborating with financial advisers in order to boost consumer understanding of life insurance and other products.

• International life companies and asset managers can play a key role by engaging with governments to strengthen (and clarify) regulations.

• Any move by the GCC governments collectively to allow ‘passporting’ – operations by companies in one country that are overseen by the regulators in another – would be particularly helpful.

n MODERATOR: Richard Dean (RD) n PANELISTS: Peter Duke (PD), Sales Director, Fidelity Worldwide Investment Farah Foustok (FF), CEO/CIO, ING Investment Management Middle East Steven Greenfield (SG), Head of Marketing, Middle East, Zurich International Life

Arwa Hamdieh (AH), Co-Founder, Financial Services Association (UAE) Fadi El-Khoury (FK), Senior Vice President and Head of Distribution – Middle East, Amundi Dan Rudd (DR), Head of MENA Wholesale, HSBC Global Asset Management Matt Waterfield (MW), General Manager Middle East and Africa, Friends Provident International Reza Yazdi (RY), Head of Sales, Morningstar Dubai

RD: Each of you represent organisations which are justifiably upbeat about the commercial opportunities that come from the development of organised savings in the GCC countries. In my preliminary discussions with each of you, I asked : what is the single challenge that ‘keeps you awake at night’? By far the most common answer was ‘regulation.’ The details of why the regulatory environment in this part of the world is considered a challenge varied from person to person. However, your answers confirmed findings from market research that

has been conducted in GCC countries over recent years.

Rightly or wrongly, the regulatory environment of the region are commonly perceived as a threat rather than an opportunity when one is considering the potential for the development of organised savings and wealth management. Before we discuss regulation, though, I welcome any comments on the general environment in which you and your peers work.

FF: I think that it is important to remember that this part of the world is still developing in many respects. Over the

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Farah Foustok years, there has been huge wealth generation. This has been channeled by governments into infrastructure projects and real assets. However, the wealth has not flowed as much as one might have expected to people who would usually be expected to buy organised savings products that are manufactured by the companies represented at this roundtable. This is partly because disposable income is not quite what one would expect given high levels of per capita GDP, due to embedded high costs of living.

MW: Economic growth throughout the GCC region over the last decade has generated job opportunities and created wealth for local nationals and expatriates alike. However, the main focus has been on immediate gratification – purchasing high end consumables, luxury cars and apartments – rather than building a diversified investment portfolio for future needs.

PD: You also have to remember that the overwhelming majority of people who are likely to buy organised savings products are expatriates. They are absolutely central to the functioning of the economies out here. They have been ever since oil began to be produced out here. They always will be. The expatriates are attracted by zero taxes and the opportunity to build up a nest egg for the future. The challenge for financial services companies is to develop products that are suitable for the period of time that each individual expatriate wishes to stay in the GCC countries.

FF: You cannot have a discussion like this without mentioning consumer education. Relative to other parts of the world, there is lower understanding of the products

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and what they can/cannot do. There is less trust of financial advisers, asset managers and international life companies.

AH: Right. The problem has been compounded by the reactiveness of the financial services companies themselves. They have not done enough to promote consumer understanding and to develop really compelling product offerings.

DR: Education is important, and not only within the financial service sector. We’re seeing greater opportunity to educate employees in the corporate sector regarding the End of Service Benefit (EOSB). This is not a pension plan as we would know from the Western World. Rather it is more like a pot of cash that is waiting for employees to take when they leave their employer. A good question for employers to think long and hard about is how they could use this pot of cash to add greater value for their staff. It provides a strong opportunity for the corporate world, financial service sector and regulator to work together and produce long term investment solutions.

FK: In other parts of the world, the development of organised savings is led by the banks. Here, on the other hand, the banks tend to be reactive. It is true that the regional banks have moved from being deposit-taking institutions to providers of structured products. However, in a world of very low interest rates, deposits have become less attractive and structured products have lost some of their appeal. Therefore, banks started developing a full range of investment solutions.

This is beneficial to the development of the mutual fund industry in the region.

RY: I think that regulations are absolutely central to the operating environment. Within countries, it is often unclear who regulates what. Quite unlike in the European Union or the United States there is little collaboration between regulators across borders.

SG: It is well understood that life insurance penetration and density rates are low in this part of the world. Here in the UAE, which has the best developed market for insurance in the GCC region, density is about US$200 per capita. That compares with density of around US$2,400 in the United

‘The challenge for financial services companies is to develop products that are suitable for the period of time that each individual expatriate wishes to stay in the GCC countries’ Peter Duke, Sales Director, Fidelity Worldwide Investment

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States or across the G7 countries. Penetration (i.e. premiums as a percentage of GDP) is also low in this part of the world, at less than 2% across the GCC – what is less well understood is that there is a high savings rate here. According to a recent report by Alpen Capital, across the region, people save about US$37 out of each US$100 that they earn, and only 4% of these savings are directed towards formal insurance vehicles.

By way of an international comparison, in North America the savings rate is $10 from every $100 earned, but 86% of these savings are directed toward insurance.

RD: Therefore, the crucial question is this: why are density and penetration rates so low in countries where the savings rates are so high?

SG: There is no single answer to that. Lack of consumer awareness is the single biggest factor. Potential customers need to be educated in relation to the benefits of life insurance and savings. In addition, amongst some segments, there is a lack of trust in the wider financial services sector. However, the problem cannot be resolved by one constituency – for want of a better word – acting on its own.

The life insurance companies cannot fix this by themselves.

Nor can the asset management companies that handle the underlying investments.

RD: What about the regulators?

SG: You raise a separate, but undeniably related, issue. Quite often there is a lack of clarity as to who, exactly, is regulated by whom, and for what activity. I’d suggest that this is also an issue in Qatar as well as here in the UAE, incidentally. We have federal regulations, free zone regulations, insurance regulations, investment regulations and bank regulations to navigate. The regulatory environment needs to be clear for all stakeholders, and to that end we see progress with our direct regulator in the UAE, the Insurance Authority. Any development needs to consider the local context and it needs to be relevant. However, change needs to take place at a pace with which the various actors can keep up.

RD: What are the regulators looking to achieve?

AH: In two words – consumer protection. They have said it time and time again. We have been trying to explain to them that they need to achieve a carefully balanced position. On one hand, they do need to ‘raise fences’ so that consumers are protected from the small number of unethical advisers.

On the other, they do not want to ‘raise fences’ so high that it becomes impossible for good products to be provided at fair prices to consumers. Thus far, though, the regulators have responded by dividing the financial services sector into

Fadi El-Khoury

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different jurisdictions – which is making market access more difficult for providers of products and services.

PD: Consumer protection is a crucial concept, because it is one on which everyone can agree. It is the obvious starting point. Fund registration and domiciliation are also important – and they are reflected in the Fund Law. Unfortunately, though, there are large areas which are not being addressed: the provision of advice to investors; the processes whereby products are brought to market; costs and fees, and so on.

Unfortunately, we will just have to wait for the next stage of regulatory development in the various GCC countries.

MW: From the life insurance company perspective, the regulations are black and white. Insurance can only be bought in the UAE from a locally-licenced broker who is working with a locally-licenced insurance company. From where we

sit, the problem is not a lack of clarity, it is a lack of resources.

Whilst we have seen a great improvement in the regulatory environment recently, the Insurance Authority does not appear currently to have enough resource to police the activities of the industry effectively.

SG: Virtually every regulator in the world will tell you that the aim of regulation is to protect the consumer. What really matters at this Roundtable is that there are not many people who actually talk to the consumers directly, and on a regular basis. We all partner with intermediaries, of some sort and to some degree, to distribute the products that we manufacture. They are the people who deal with the consumers that are being protected, and the group here today needs to engage regularly with those who deal with these clients, each and every day.

FK: Since the financial crisis in 2008, the financial system

The global spread of financial advice regulation Reproduced with kind permission from International Adviser

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JURISDICTION United Kingdom

Australia

NAME OF REVIEW OR SCHEME Retail Distribution Review (RDR)

Future of Financial Advice Act (FoFA)

DATE INTRODUCED June 2006

August 2011

INTRODUCING BODY Financial Services Authority

Australian Government, via its Treasury; implemented

by Minister for Financial Services & Superannuation

EFFECTIVE DATE 1/1/13

1/7/12

European Union

Markets in Financial Directive (MiFID)

April 2004

European Parliament, EU Council

TBC

European Union

November 2010

European Commission

TBC

Norway

Packaged Retail Investment Products initiative (PRIPs) Authorisation Scheme for Financial Advisers (AFR)

January 2009

1 /4/09

Singapore

New Zealand

Financial Advisory Industry Review (FAIR)

Financial Advisers Act 2008

March 2012

October 2011

Finance Norway, Norwegian Mutual Fund Assn, Finance Sector Union Monetary Authority of Singapore

Financial Markets Authority

New Zealand

Financial Markets Conduct Bill

October 2011

Financial Markets Authority

TBC

TBC

In force

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in many parts of the world is moving towards more regulations. Given that finance is a cross border activity, the GCC will have to engage in developing its regulatory framework in order for its institutions to match international standards for investor protection. In that respect , we welcome the initiatives taken as long as they strike a fair balance between the priority of protecting investors and minimising hurdles for the development of the industry.

RD: When we interview these intermediaries next week, what are the key questions that I should ask?

AH: Ask them to specify what they have done to make their views known to the regulators. It seems to me that the regulators have been making a lot of assumptions on behalf of the investors

‘Regulators have divided the financial services sector into different jurisdictions – which is making market access more difficult for providers of products and services’ Arwa Hamdieh, Co-Founder, Financial Services Association

DR: But these intermediaries are not a homogeneous group with a single view of what they want. Here in the UAE, Independent financial advisers as such do

KEY FEATURES • Up-front fees to replace commissions • Greater transparency • Advisers will have to hold higher-level qualifications than previously • A new category of “restricted” advisers will be introduced, who specialise in an area or do not offer a whole-of-market range of products • Fee-based regime to replace commissions • Ban on “conflicted remuneration” (any payments from products and platforms to advisers) • Ban on certain insurance product commissions • Ban on “soft dollar benefits” (non- monetary incentives from product providers to advisers) • Ban on asset-based fees, where the client has borrowed to finance the product’s purchase • “Opt in” feature which requires the adviser to send a renewal (“opt in”) notice every two years to new clients, as well as an annual fee disclosure statement to all client • Existing features provide harmonised cross-border regulation of investment industry throughout Europe • A MiFID II proposal published in October by the European Commission would ban commission for independent advisers across the EU. However, an EU Parliament amendment to this controversial plan would require advisers simply to disclose any commissions they receive • Mandates that advisers’ sales and advice comply with MiFID rules on investor protection and good business ethics; covers “packaged” investment products only • Raises qualification standards for financial advisers by creating an authorisation regime, with refresher tests every two years • Separate authorisation schemes for life and non-life product providers, which are to be integrated eventually with adviser scheme to one system Areas to be considered are: • Raising the competence of financial advisory representatives, and the quality of their firms • Lowering the distribution costs of insurance products • Promotion of a “fair dealing” culture • Making financial advice a “dedicated and professional vocation” • All financial advisers must be registered, investment advisers must in addition be authorised & meet tougher tests including minimum educational, ethics and competence requirements, provide full disclosure to investors including all remuneration, must undertake ongoing training, and must not advise on products or advice outside their competence • Superannuation schemes must limit new membership to persons with a specific link to New Zealand (for example, employed by a New Zealand employer or residency) or schemes must meet prescribed requirements, including in relation to lock-in and transfer

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‘The financial advisory community in this part of the world has continued to develop over the last five years, supported by increased consumer awareness’

Steven Greenfield, Head of Marketing, Middle East, Zurich International Life

not officially exist. This is mainly down to the current regulation framework. There are insurance brokers who are licensed to sell insurance products and are regulated by the Insurance Authority. There are advisers who work for banks. They sell insurance, as well as other investment solutions like mutual funds and structured notes.

RD: Therefore, how would you categorise most advisory firms operating in the GCC? MW: I would say they are insurance brokers, but they are

Peter Duke

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not necessarily regulated by the Insurance Authority. Some of them have sought licences from SCA or from the Central Bank of the UAE as well as from the Insurance Authority.

SG: Some of these organisations have been regulated by the Central Bank for several years. Using a broad term like ‘IFA’ that has a clear meaning in other parts of the world can be misleading. There is no regulation or legislation here in the UAE that covers financial advice standards currently. That is the crucial issue. It is not always clear who regulates whom, and for what, precise activity related to the wider subject of ‘financial advice’.

MW: I would ask if I could sell insurance, under an SCA licence.

SG: Exactly – and the answer you would receive, today, is, ‘no’.

RD: So where are we in terms of defining the roles of the various regulatory organisations here in the UAE? AH: They are still discussing how to split the roles between the Central Bank and SCA. Many of the Central Bank’s responsibilities are being transferred to SCA, which will eventually become the Emirates Financial Services Authority. It is not clear what will happen to the Insurance Authority, though. The Central Bank will continue to oversee retail banks for a two year transitional period – after which responsibility will be transferred to SCA. RD: Remember that there are more regulatory bodies here than the Central Bank, the Insurance Authority and SCA. You also have the DIFC, the Ministry of Finance and the Department of Economic Development. Of course, those are the bodies that are in the UAE alone. Are there any other models?

DR: Singapore is a good example of what is possible.

The Monetary Authority of Singapore (MAS) is the omnibus regulator. It is a one-stop shop. It understands the issues and the product providers. It really appreciates what consumer protection means. It collaborates with regulators in other countries. Here in the GCC, we’re seeing the financial regulators start to focus on the retail market and those who are operating in different jurisdictions. Just recently the Saudi Capital Markets Authority (CMA) has cracked down on unlicensed operators – but we have heard very little from the regulators in the other countries.

PD: That’s right. It means that lack of co-ordination between GCC regulators is an additional cost that an organisation must bear if it wants to expand across the region.

RY: Talking of models, it is very unusual for one country to have two regulatory systems – one for the onshore markets and one for the offshore markets – as is the case here in the UAE.

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From left to right: Matt Waterfield, Arwa Hamdieh and Reza Yazdi RD: So, you are advocating more transparency. Would that prevent the sharp practices that gave financial advisers in this part of the world a bad name five or 10 years ago?

SG: I am advocating relevant transparency. The consumers need to be able to see very clearly what benefits they receive for the costs that are being borne.

I am also advocating that, over time the need for transparency be recognised formally by the regulations.

In relation to the sharp practices that you mention, I believe that the financial advisory community in this part of the world has continued to develop over the last five years, supported by increased consumer awareness, and the support of financial institutions in the areas of training and development, and practical business tools which are based upon international best practice.It is this development which must continue, in collaboration, and will ultimately drive the standard of our industry in this region forward.

RD: So, who is responsible for addressing issues such as fees that are too high or fees that are opaque?

MW: As manufacturers of insurance products, we try to provide extra value to our distributors by supporting them with training and technical assistance. You have to remember that true sharp practice – deliberate mis-selling of a product by an intermediary - happens very rarely. What is far more common is mis-selling of

a product because the intermediary does not really understand it. As insurers, we can’t keep the less ethical advisers away from consumers, but we can provide education to honest intermediaries.

RY: Lack of understanding by intermediaries caused a lot of grief for investors who bought the offerings of asset managers through platforms after 2008.

MW: That’s a good example of where key players within the industry have worked to make sure that their offerings are much better understood by the intermediaries.

FF: Isn’t remuneration at the heart of this issue?

Regardless of how well the intermediaries are educated, they have to make a living. How they are compensated may have a crucial impact on the products that are offered to the consumer.

SG: I accept that we, the insurance companies that manufacture the products, have a responsibility to help with the education of intermediaries (and, indirectly, of consumers). Overall, though, I would be more positive on the technical understanding of the intermediaries than many of the other people here at the Roundtable.

Over the last five years or so, we have seen a clear trend for brokers and other intermediaries to increasingly use products that are simpler and easier for the consumer to understand. These products don’t necessarily pay commissions that are as high as those that were previously being paid on more complex products.

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Dan Rudd RD: One issue that has been raised about the regulators elsewhere in the world is one of resources – or lack of them. Too often you hear that the regulators cannot hire the best people because those people have already been employed – or poached – by the banks. Is that a problem in this part of the world?

AH: That is a question in relation to which the regulators have been very reluctant to share information.

DR: SCA’s people are on a steep learning curve about our industry and have come a very long way. We have found that they are very ready to listen – and to react constructively – to the suggestions that we make.

FF: At ING Investment Management (Middle East), we have always had good communications with the regulator. That has included staff education programmes through our offices for the regulators, auditors etc, in order to enable them to gain a better understanding of the institutional management business.

RD: I would be grateful for concluding remarks from all of you. In particular, I would be pleased to know if your respective organisations have undertaken any market research in this part of the world that actually asks consumers the questions that we have been discussing.

SG: As it happens, we have undertaken a wave of research here in the UAE over the last two weeks. We spoke to existing customers and potential customers within our target demographic groups. The brutal truth, though, is that solid market research that produces insightful hard numbers is

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the exception, not the norm. Friends Provident International has a good track record in this area. So too does Zurich International Life. HSBC’s annual survey of expatriates provides some insights. Ernst & Young have produced some very interesting reports that deal with the insurance sectors of the region. Alpen Capital generates interesting numbers as well. However, as a general rule, collation of hard numbers in this part of the world is hard work. It is certainly not easy for a consumer who uses the products that we provide.

FK: In the institutional space, investment performance, reputation and track record are what really matter. In the retail space, one ‘pays to play.’ That includes the monetary question of how much is paid to the intermediary who distributes the product. It also includes the costs of producing the marketing material and educational material that the intermediaries need. Much can be done by collaborating with life insurance companies to stage events that raise public awareness about investment products.

RY: I have a wish list with three items. First, I would like to see a regulatory environment that is much less fragmented.

Second, I want to see intermediaries that have greater understanding of the particular needs of the consumers to whom they are distributing products. Third, I desire a greater variety of funds and other products, so that it is easier for the consumers to find solutions that are truly appropriate for them.

SG: Development of the regulatory environment will continue, which will support the overall development that we have discussed today. Talking from an insurance company perspective, we are actively engaged with the Insurance Authority, and remain confident that the imminent regulatory changes will bring benefits to our market.

What really matters, though, is increased awareness on the part of the consumer. That awareness will come jointly from those organizations represented here today, and from the intermediaries who distribute the products that we manufacture. I believe, therefore, that the insurance companies and the asset managers who sit in the middle – between the regulators and the consumers – have a duty to collaborate. We should collaborate in order to promote education and understanding.

DR: My wish list would include much greater transparency in relation to costs and fees, and a high level examination, which would test the professional knowledge of the intermediaries.

FF: Education would be high on my wish list. That is something which we are well placed to undertake. We already work with the regulators and the auditors. In general, we need more collaboration between parties who are at different places in the value chain. We need to brainstorm in order to work out how to strengthen the industry generally.

Finally, we need much more cooperation between the

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various regional and local regulators. In particular, the manufacturers of financial products need a passport that would enable them to operate freely across all the GCC countries, yet we know this is a difficult task with different legal structures in place across the region PD: Greater coordination in regulation is essential. That includes coordination between the onshore and offshore regulators here in the UAE. In general, though, there should be much more transparency for the consumer.

AH: The industry should take steps to create a “successful experiment” whereby they could demonstrate how an appropriate regulatory framework combined with solutiondriven product offerings can bring value to the market.

MW: I think it’s worth acknowledging the great job being done by the Insurance Authority, how quickly the UAE regulatory environment has developed and how it continues to develop through dialogue with the major industry players. We tend to forget that in more developed markets, like the UK for example, companies like Friends Provident International have more than 200 years experience of the life industry and regulation of that market is still evolving. At the end of the day, consumer education and research is what

‘The manufacturers of financial products need a passport that would enable them to operate freely across all the GCC countries, yet we know this is a difficult task with different legal structures in place across the region’ Farah Foustok (FF), CEO/CIO, ING Investment Management Middle East

matters most. We can only charge the consumer a fair price if we can increase customers’ willingness to pay. Through developing products that deliver value to the consumer and profitability to ourselves, we all benefit. In the meantime, the industry needs to do more to research and understand the consumer’s needs better RD: Thank you all, very much.

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Afterword – some general observations In GCC countries, it is the interaction between a financial adviser and a consumer that determines whether or not a life insurance (or other organised savings/ wealth management) product is sold. That means that advisers will be central to the education process if understanding and trust are to grow.

However, it is apparent that manufacturers of the products – the international life companies and their partners, the international asset managers – do not yet have a sufficiently clear understanding of consumers.

What consumers want? How much consumers understand? How much trust do consumers have in the various organisations that are involved in their purchase of life insurance (or another product)?

could do to build trust in their products. For instance, they could set up an independent ombudsman, perhaps under the aegis of the UAE Insurance Authority, who could handle complaints from aggrieved consumers.

Regulatory change is a process that is evolutionary rather than revolutionary. We would be reluctant to forecast developments that could take place in the next 12 months. However, we think that it is perfectly reasonable to produce a checklist which would indicate very clearly whether progress is being made over the next two years.

As we note in the introduction, the number of financial advisers who see the current regulatory environment in the GCC region as a challenge is as large as those who see it as an opportunity. For now, we agree with both groups.

Much more market research needs to be completed by international life companies and international asset managers in a part of the world where business strategies that have worked elsewhere cannot be imported without substantial modifications.

Even if only a simple majority of the 10 developments listed above actually take place in the next couple of years, the opportunities for international life companies, asset managers and financial adviser groups could be enormous.

There are many other initiatives that the international life companies and the asset managers, working together,

Nigel Sillitoe Chief Executive Officer, Insight Discovery

Our wish list 1

Amendment to the relevant UAE Insurance Authority and/or SCA regulations so that financial advisers are specifically defined.

2

Clear definition as to which agency in the UAE is responsible for oversight of financial advisers.

3

Very firm indications from the UAE operations of the major UK independent financial adviser (IFA) companies that their UAE operations adopt the requirements of the UK’s Retail Distribution Review (RDR) regime.

6 Establishment of an ombudsman or other suitable institution that can handle complaints from consumers of organised savings/wealth management products.

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Very clear move towards ‘passporting’ within the wider GCC, in order to become aligned with international markets (i.e. EU) on market access issues.

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Demonstrable and substantial growth in financial services activities of all kinds that are undertaken by companies in the DIFC.

4 Clarity as to the role of the UAE’s Insurance Authority.

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Quantified activity (with measured results) by the leading international life companies and asset managers in relation to education of financial advisers and consumers. This may be conducted through the Financial Services Association (UAE).

9 Arrival of new international life companies and major UK independent financial adviser companies in the UAE market.

10 Industry data, made public and collected by local regulators.

EXCLUSIVE INTERVIEWS WITH LEADING ADVISORY FIRMS

EXCLUSIVE INTERVIEWS WITH LEADING ADVISORY FIRMS Exclusive interviews with leading advisory firms We ask five leading advisory firms for their views on recent changes to the UK financial services industry, their fund selection procedures and how their advisers are trained Kevin Thorp CEO, Acuma Given the changes in the UK financial services industry, for example commission disclosure, how do you expect this to impact the UAE? I don’t think that RDR in the UK will impact the UAE retrospectively at all. The only impact it will have will be on the product providers, and whether the product providers drive through changes from the regulatory point of view from the UK and IOM governments. But from the ground floor here, for the next three years at least, I don’t think it will have an impact at all.

How do you currently go about selecting funds?

We are quite strict in selecting funds. First of all, we have a full time fully qualified Chief Investment Officer with a great background. We have Bloomberg professional as part of the office to do fund filtering. We will select funds on the basis of tenure of fund manager, strength and security of fund, mainly triple A-rated, geographical split, risk profile and volatility.

These are the basics, as you know. But, just as fundamental are questions of funds, domicile, regulatory jurisdiction, audit status, and all other questions that would be considered in a proper due diligence process.

Do you think there is room for more life companies to enter this market? If the answer is yes, is it because of a market gap around products, funds, services, technology or business acceptance gaps that you are looking for a new entrant to fill?

No, I think if they enter the market they just see it as a place to come because they have been squeezed tight on margins in Europe or the UK or wherever else they may be. Unless they come with a fundamentally different proposition, technical training, support, more client focused products I believe they are likely to struggle in this market.

What could the gap be from life companies that someone could plug if they wanted to enter?

If you are talking pure life, the gap is proper income protection and critical illness products for multi nationals. This is a big issue.

Also, there is need alternative savings contracts that are more keenly costed – not initial charged or contractual savings vehicles.

Which tools do you currently use for asset allocation, risk management and diversification?

Bloomberg professional. We start the advice process by completing a client risk profile questionnaire which highlights the clients attitude to risk, this is then used to select the appropriate funds to meet their level of risk. The investment

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funds are chosen from our recommended range on which we have completed full due diligence.

What is your ongoing process for training and developing your advisers?

First of all, all our people are qualified, the vast majority with diplomas and other senior qualifications. We have ongoing training and weekly meetings where we bring in product managers and technical people. It’s an ongoing process.

Which diplomas are required?

It really depends which country they have come from, as we are dealing with multi nationals. The minimum qualification is the CII or equivalent.

How do you differentiate yourself from other advisory firms in the region?

I think that’s quite simple, we try to do the job as best as we can. However, we are the only company that I know that has four licenses – SCA, Central Bank, Ministry of Economy and Abu Dhabi Health Authority License. We need all those licences, because we either do the job properly or not at all. If we are going to maximise cross-selling of (or advice in relation to) those different products, we need the different licences.

One of the big issues out here is that some people are selling certain products without the correct licenses or worse simply tripping into the market with no licences at all.

Tim Searle Chairman, Globaleye Given the changes in the UK financial services industry, for example commission disclosure, how do you expect this to impact the UAE? The changes in the UK will impact offshore markets. When things happen in the UK, there’s a lag and then eventually they occur offshore at some stage. What has happened in the UK follows what has happened in North America where things like commission disclosure, RDR and time structures have all occurred.

Interestingly, the United States has now almost gone full cycle.

They’re going back to using commissions. They are facing up to a key problem – which we believe will become apparent with RDR – which is this: if you’re going to tell people whatever their trade happens to be, financial services in our case, that you’re not going to get paid any money for doing it then why would you undertake the transaction? As we know, the big picture is that many people in developed countries are totally underinsured.

They don’t have enough money in their pension pots. A part of the problem is that the people who give the advice that is needed are

EXCLUSIVE INTERVIEWS WITH LEADING ADVISORY FIRMS not being properly paid for that advice. So, the people who need the advice are not going to receive it. As I made very clear to the regulator in Singapore, the regulator is there as the champion for the consumer. The regulator must make sure that the consumer is getting a fair deal. The regulator must increase transparency and so forth. However, all this is irrelevant if advisers are not properly paid. The regulator also has a role to play in encouraging people to take financial advice. All too often people contact advisers in relation to life insurance, critical illness cover and other matters when it is already too late. The hard numbers in the UK are pretty depressing. The average weekly pension is £107 and the average pension pot at retirement is £74,000. There are some initiatives to boost corporate schemes for groups of a certain size. Unless this is pushed by the regulator, though, nothing much will happen.

How do you currently go about selecting funds?

We use Financial Express and we have a close relationship with Collins Stewart. In our Singapore operation, where we are licenced to give advice, we create a weekly investment bulletin where we talk about gold, commodities, equities, bonds, cash etc with a running commentary supported by rolling averages sourced from Financial Express. We build our recommendations around this data., with a buy some whole recommendation as well, so in Asia we have to be a lot more investment focussed. So we’re not using anything which is wild but financial express is the core.

Do you think there is room for more life companies to enter this market? If the answer is yes, is it because of a market gap around products, funds, services, technology or business acceptance gaps that you are looking for a new entrant to fill?

Yes. The proposition from the providers hasn’t really changed in that you to save enough money to retire one day and protection in place to protect yourself, your family, your business or whatever. So, the products that the providers supply haven’t really changed that much. Most brokerages like us haven’t really changed, but what has changed massively is the consumer.

Instant gratification is the name of the game. The consumer now expects pizza more quickly than the police – that’s the world in which we live. Valuations and solutions must be delivered immediately. That means that choice and transparency must be delivered instantly. Therefore, there is always room in the market for another entrant which can provide – instantly – additional choice and another, better, solution. New entrants are also likely to bring keener pricing and better product features, which is good news. As noted above, the products really have not fundamentally changed that much over the last 15-20 years.

What is your ongoing process for training and developing your advisers?

First of all, I would stress that we are very committed to training and development. We are an Investors in People company.

We have a commitment that every single adviser, regardless

of their qualifications from their home countries, sit offshore examinations – and we give them a six-month window to do that.

The CII or CISI routes are available. We also have CPD, which is not a requirement here – but we just roll it out to the group as it is required in some of the other places in the world in which we operate. I don’t understand why it’s not rolled out here or why some of the providers here don’t insist on it, but we do it regardless. So there are the accredited examinations boards that we follow and our own internal CPD as well. Moreover, we are moving towards compensation structures that suit all stakeholders. It is well known that, in general, clients do not like to pay for advice. So, we have developed a Practice Buy-Out (PBO) model which rewards advisers for evidence of ongoing service.

It allows them to be paid on the assets under management (AUM) for which they are responsible even after they have left the company. Models like this are only effective if one has suitably robust Information Technology (IT) systems in place. We are widely recognised as being the market leader for our CRM, client aggregation, marketing and remuneration systems.

How do you differentiate yourself from other advisory firms in the region?

We are a global player with offices throughout Europe, the Middle East and Asia. We’re regulated in the places in which we operate. A part of my job is the acquisition of licenses, because these licenses will be more difficult to acquire in the future.

Legislation, compliance and regulation is going to get tougher.

So, from that perspective we are a global player. This is great for clients as we can go all over the world with them. With regards to meeting the pressure on commission, disclosure, fees and the like the remuneration focus for the group is on residual income.

It is a known fact that Clients in general do not like paying for advice so the commission structure is the one that prevails. That said, we are weaning not only ourselves but our Clients too onto other forms of remuneration in particular we have created a Practice Buy-Out (PBO) which rewards Advisers for evidence of ongoing service and allows them to be paid on AUM even after they have left the company. This proposition can only be effective with robust IT and we are recognized as the market leader in terms of online CRM, Client aggregation, marketing and remuneration systems.

Sarah Lord Wealth Planning Director, Killik Given the changes in the UK financial services industry, for example commission disclosure, how do you expect this to impact the UAE? Unfortunately I don’t think it’s really going to have that much impact in the UAE because here there is no requirement for commission disclosure. It may ultimately have an impact on the providers and how they approach their product charging – because they are moving to factory gate prices and no

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EXCLUSIVE INTERVIEWS WITH LEADING ADVISORY FIRMS commission built into the contract in the UK. But I don’t think that will happen immediately.

How do you currently go about selecting funds?

It’s all done in-house by our dedicated research team based in London. We have a specialist equity and fixed income research desk and a funds research desk, so it’s the funds team that are researching funds for us. They are looking at a number of criteria. They consider not just performance but a number of other factors such as structure (open or closed ended).

Granted, performance is important, but so are other matters such as associated charges. Also, we look to see if someone has their own money in the funds: this gives an indication of whether they actually believe in the funds.

Do you think there is room for more life companies to enter this market? If the answer is yes, is it because of a market gap around products, funds, services, technology or business acceptance gaps that you are looking for a new entrant to fill?

Yes, I really do. There is not enough competition here. There are only a few key players. If you look at other key jurisdictions like the UK and Far East there are more players in the market.

However, newcomers will need licenses to operate over here from the Insurance Authority.

What tools to Killik currently use for asset allocation, risk management and diversification?

It really varies. We have an investment committee: its approach is to look at the economic situation and give a macro outlook, It then filters that down into the strategic asset allocation that we would suggest for clients in various risk categories. It then looks at that practical asset allocation and whether it’s a good time to buy.

It comes up with views as to the suitability of portfolios for clients.

We are restricted in so far as that acts as a guideline for the asset managers in terms of the overall percentages of portfolios that are allocated to each asset class. So, we don’t really use tools.

What is your ongoing process for training and developing your advisers?

As a firm we are a great believer in developing people, and in encouraging increased knowledge and technical expertise.

The company supports qualifications, and will pay for people to sit exams whether the CISI for the investment managers or the CII for the financial advisors. We encourage individuals to continue to learn. Thus financial advisors are expected to achieve Chartered Financial Planner status, and investment managers to achieve Chartered status through the CISI. How do you differentiate yourself from other advisory firms in the region?

By being very open and honest as far as cost and advice is concerned. We are transparent over charges and are fee-based,

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so we are different in the way in which we are renumerated for the advice that we give. This is probably one of the key differentiators.

We are DIFC-based so we have the DFSA regulation. We are also a branch of the main UK operation so we fall under the UK FSA: that gives our clients comfort that we are professionals.

Sean Kelleher CEO, Mondial Given the changes in the UK financial services industry, for example commission disclosure, how do you expect this to impact the UAE? Yes, it will eventually. However, as to when is impossible to say.

There has to be some change because many of our product providers are ‘conditioned’ by UK best practice and UK legislation. The UAE can’t therefore be immune to change.

Do you have a plan B for if there is more commission disclosure here? Will you for example offer clients, or maybe you do already, fee based commission stuctures?

Plan B would not be too far away from Plan A, which is based on driving fees and recurring income. We have enjoyed a +30% rise in recurring income and a similar rise in fees. So compulsion to ‘disclose’ might even be a good thing for us in comparison to distribution channels focussed on up-front charges. However, the market as a whole isn’t ready to charge fees. If we only sold on a fee basis, we would go under. That’s because the market isn’t prepared to pay the bills, and there is no enforcement of fees. So, the contracts are not going to work. We don’t want to be the first to move into a fee-only environment, but we will go with the flow commercially. Do we think it’s a good idea? Yes. How do you currently go about selecting funds?

We run with the philosophy that’s available on our website www. mondialdubai.com. In Managing Risk we have a section called Core and Satellite Investment Philosophy. We use external professionals to run the core of any strategy, and that is integrated into the entire philosophy. The selection of funds is built up on a process that starts with client’s filling in a 22-page fact find document. Every client has to complete a fact find, or KYC. The fact find looks at their entire balance sheet. It breaks the balance sheet down. It looks at income flow and expenditure. Then it moves on to protection, investor attitude to risk and tolerance to risk. Phase 1 is completing the fact find. Then each client is classified as one of two types of investors – strategic or tactical.

We identify the risk profile very carefully. Then disclaimers are signed, and responsibility is transferred to us for the selection of funds with the clients input (under an advisory mandate), or under our ‘Core and Satellite’ philosophy which could be either advisory or discretionary. Core funds are ‘mult-asset’ funds managed by teams equipped with research departments. It means that investment decisions re backed by copious research. Satellite funds are any funds which are NOT Core Funds. Our three-person

EXCLUSIVE INTERVIEWS WITH LEADING ADVISORY FIRMS investment committee chooses the the satellite funds, and each adviser might have their preferences, and each client may have their preferences. The most important thing is the investment philosophy and our policy. For clients to invest outside of that philosophy they would need to sign a disclaimer. Within the investment philosophy there is a role for any type of fund. High risk assets are never more than 10% of the total. The core, which drives performance, will always be more than 50% of the total.

Do you think there is room for more life companies to enter this market?

To me a product is a red herring. If a salesman values one life company over another then he/she must have some interest in it.

To me the only reason a salesman should value one over the other is if they are getting better service from them. My preference would be to have fewer life companies, so we build up better relationships with the few that do provide us with a service.

What is your ongoing process for training and developing your advisers?

We are backing training and professional exams as the most important part of the next stage of our development. The focus has to be on quality. Human assets are the most valuable thing.

If the whole incentive from the RDR approach is building up something for long-term value rather than taking value at the front end in commission, then you’ve got to have lots of assets under stewardship. Assets can only be retained and managed by people who know what they are doing, so you have to develop your people. We run an Academy and have two sets of training, internal and external. The Academy focusses on internal training currently, and we are trying to get everyone through CISI exams. We have started docking people on their pay if they don’t pass their exams in a certain timeframe.

How do you differentiate yourself from other advisory firms in the region?

Well we’ve got the best advisers here! Our business last year grew 70% and this year we’ve grown 20%. I believe that’s because of the quality of our advisers. The average age of our Advisers is late-40s. I try to develop two advisers per annum to keep the team at an improving strength of 20% per annum.

20% per annum growth is about right for the small to mediumsized business. Our assets are our staff and the management team are very close to our staff.

Mahmoud Nodjoumi CEO, Nexus Insurance Brokers Given the changes in the UK financial services industry, for example commission disclosure, how do you expect this to impact the UAE? There have been a number of regulatory changes in the UK, of which commission disclosure was one of the first. It certainly

frightened advisers, and many became temporarily dormant.

However, after about three months, advisers resumed their normal day-to-day activities. To be honest, customers have little interest in how the adviser is paid – they are much more interested in how much they are going to get back for their savings or investment and the feeling of security that goes with taking action in respect of their key financial risks and opportunities. Much more important have been the advent of professional qualifications, suitability letters, attitude to risk questionnaires, platforms (financial planning tools), portfolios planning tools and the imposition of financial prudence requirements. All jurisdictions are likely to follow the model of regulation laid out by the International Association of Insurance Supervisors (IAIS). Most regulators are signed up with this organisation. The pace of change will be determined by individual jurisdictions. For instance, Qatar seems to be an early adopter; UAE may arrive later. But we must expect the change to come at some time, and to the same or a similar formula. We are already operating very much to UK Regulatory standards in Qatar under the watchful eye of the QFCRA, and commission disclosure there has not caused customers to refrain from seeking financial advice. Preparation for professional qualifications is already underway, with implementation of the standard expected in early 2014. Suitability letters are used, as is Attitude to Risk profiling. This may feel like a giant change in the UAE market, but customers expect, and advisers will quickly get used to, this level of professionalism.

How do you currently go about selecting funds?

We assess the client’s attitude to risk, using a range of methods across the various jurisdictions in which we work. We only use funds on product providers’ platforms; we identify the risk profile of the customer, and select funds that match the risk profile. We have some model portfolios, but these are for guidance only.

Do you think there is room for more life companies to enter this market? If the answer is yes, is it because of a market gap around products, funds, services, technology or business acceptance gaps that you are looking for a new entrant to fill?

Yes. There is too little competition, making it difficult to be and remain totally independent. There are too few products, and too little real innovation. There is a real need for more Takaful providers who pay competitive rates of commission – without which it is difficult for them to get real traction in the market.

Which tools do you currently use for asset allocation, risk management and diversification?

All the funds on our providers’ platforms are risk-rated and, depending on the risk profile identified, we would be able to match the appropriate risk-rated funds to the customer’s risk profile. This is not as straightforward as it sounds. Depending

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EXCLUSIVE INTERVIEWS WITH LEADING ADVISORY FIRMS on the unique circumstances of the customer, we will still need to conduct research into the identified risk range, to ensure that what is selected will not only match the customer’s risk rating, but is suited to his/her particular circumstances.

What is your ongoing process for training and developing your advisers?

Nexus views training and development as a key element in its success. The Board is fully committed to an on-going investment in the training of its people, at all levels, within the business. We have training modules that cover sales skills, sales development, and sales management and these are conducted by our in-house training resources. They deal with advisers and managers at various levels of experience and competence. In Qatar, we are developing investment training to take our sales force to Qualification and Credit Framework Level 3 (certificate) and then to Level 4 (diploma). This is a regulatory stipulation and if necessary, we will be able to cascade this across our organisation, including the elements in the UAE. All training is accompanied by testing, and business sensitive areas such as anti-money laundering, are tested annually. Nexus undertakes training either through our training and development team or by our product providers. Training of the existing sales force is a weekly affair. Nexus works in partnership with the CII and endorses the importance of keeping knowledge and skills up to date, through Continuous Professional Development (CPD). In summary, Nexus continues to strengthen and further improve our training offering. In late 2011 we appointed a dedicated Training & Development Director to oversee and further strengthen the training function. We view training as vital in the ongoing development of the business, to improve customer satisfaction and to giving Nexus a competitive edge in an ever more competitive market place.

How do you differentiate yourself from other advisory firms in the region?

From a client perspective, he or she is typically buying the product of an international or local insurance company through a broker such as Nexus. We are fully committed to providing a high quality product and a high quality service.

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We achieve this through: • All our advisers go through a stringent selection filtering recruitment process, this is to ensure they have the correct aptitude and attitude and possess a suitable qualification.

• On joining, our advisers receive full and formal training, and go through a full induction and orientation process before being certified as a Nexus Adviser.

• 100% Compliance checking of business to ensure all facets of the client’s circumstances are reflected in the products purchased; and that all anti-money laundering regulations are met.

• Due diligence of product providers to ensure we only sell the products of reputable insurance companies • Know Your Client – we insist on a full fact find before a recommendation is made • Low spans of control for sales managers to ensure we remain in control of our sales teams on an ongoing basis • Nexus is a one-stop shop to ensure a client can purchase all his/her protection and investment products through a single advisory relationship • Thorough compliance monitoring to uncover systemic weaknesses and to ensure we provide the right advice to clients throughout the life of their policies We currently have an in-force portfolio of some 30,000 customers and we are focused on the MENA region, and on serving our customers here. To complement our Sales & Marketing Team, we have a well-established Customer Services Team that is in touch with our clients on a regular basis, to identify and attend to any areas of a client’s need.

We have established licensed office operations in the UAE (Dubai & Abu Dhabi), Kingdom of Bahrain, State of Qatar and Republic of Lebanon. Our applications to enter the Kingdom of Saudi Arabia and State of Kuwait are in process. Nexus is considered by many to be the first choice provider of insurance and financial advice. As a team we share a common goal – to provide a world-class service to our clients. Our success can be attributed to the teamwork, dedication, professionalism and commitment displayed by everyone within the Nexus family – our people are undoubtedly our greatest asset.

PROFILES

PANELIST PROFILES

Peter Duke, sales director, Fidelity Worldwide Investment Peter is head of Fidelity’s distribution business in the Middle East. Peter has 22 years of industry experience and has worked for Fidelity for over nine years, the last seven years of which he has been based in the UAE. Prior to joining Fidelity, Peter worked for AMP (an Australian life assurance company) and Aviva in the UK. Peter is a member of the Chartered Insurance Institute by qualification and holds the Investment Management Certificate.

Fadi El-Khoury, SVP - head of distribution Middle East, Amundi Fadi has been working for the Amundi group (asset management arm of Credit Agricole and Société Générale) for 12 years. In France, he occupied several roles in developing solutions for the distribution networks of the baking arms of the group. He joined Amundi in the Middle East in 2007 and is now heading the distribution business across the region. The clients he is serving range from private banks, retail banks, life companies and IFAs. Fadi holds two masters degrees, an MA in International Business and Management from the University of Westminster in London and an MSc in Mechatronics from King’s College, University of London

Farah Foustok, CEO, ING Investment Management (Middle East & Africa) Farah joined ING Investment Management, Dubai, as the chief investment officer responsible for building the investment team, across various asset classes. She became the CEO at the beginning of 2009. She has over 18 years’ experience analysing and valuing companies in the UK, Europe and most recently in the region. Prior to joining ING IM she was the head of asset management at NBD Investment Bank, managing a team of 10 investment professionals with approximately US$2bn of assets under management. Farah was a senior fund manager at EFG-Hermes prior to NBD IB, responsible for managing GCC and MENA funds and portfolios. Farah spent five years at Deutsche Bank in London, within the equity strategy team, developing the in-house valuation model, CROCI, and implementing it across the regional offices. She has also worked at Morgan Stanley within equity sales, covering European Institutions, followed by three years in commercial real estate advisory in Europe. Farah also has private equity exposure through a private venture in Argentina and an internet start-up in the UK. Most recently, Farah was selected to participate on an advisory panel for the DFSA, local regulator, to review and recommend amendments to the fund regime regulations to promote the DIFC as a fund domicile location. In 2012, Farah was elected as the chairperson of the board for the UAE Financial Servies Association, a non-profit organisation set up to promote best practice and engage actively with regulators and Government bodies on policy development and critical issues impacting the development of the industry. Farah holds a BSc Honours in Mathematics from King’s College in London and an MBA from Imperial College, London, specialising in Finance

Steven Greenfield, head of marketing - Middle East, Zurich International life Steven has 15 years of commercial financial services experience, in particular in emerging markets, and has worked with a range of local and international intermediaries including brokers and banks. His education is from Cass Business School, City University London, and the University of Leicester. Steven has worked for Zurich International in both sales and marketing roles since 2002, and has been based in the Middle East since 2006. Previously based in London, Steven managed individual and corporate sales across Sub Saharan Africa. Steven started his career in 1997 in the UK domestic market as an intermediary sales manager with Eagle Star Life, under the Professional Development Foundation. Steven moved to a corporate pensions focused role with Friends Provident in the UK in 2000, and rejoined the Zurich group in 2002.

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PANELIST PROFILES

Arwa Hamdieh, co-founder, Financial Services Association (UAE) Arwa is an expert corporate affairs professional, and an active stakeholder engagement and public opinion advocate with over 14 years of experience in those fields working in the Middle East and GCC region with local and multinational companies such as HSBC, Dubai Mercantile Exchange and Arqaam Capital, in addition to working with development agencies like USAID and IFC. Arwa is a passionate advocate of positive change through structured policy development initiatives. She was the first to introduce the concept of professional advocacy into the GCC region, championing the set up of the first trade association and representative body for the financial services industry in the UAE, the Financial Services Association (UAE), where financial institutions, both local and international, engage with the Regulators and Legislators on policies and regulations with the aim of improving the regulatory environment for the benefit of the entire financial services industry in the UAE. Arwa holds a degree in Law from the University of Jordan, and MBA from New York Institute of Technology

Dan Rudd, regional head of Middle East & North Africa Wholesale, HSBC Global Asset Management Daniel has held the position of regional head of MENA Wholesale, at HSBC Global Asset Management since 2008. In this role, based in Dubai, he is tasked with promoting HSBC’s fund range and expanding the client base within the UAE. He joined HSBC Global Asset Management as head of offshore sales in November 2005, focusing on key strategic distributors across the globe, and the promotion of key strategies such as BRIC and HSBC’s wider emerging markets capability. Rudd moved back to a UK domiciled role in 2007, heading up the UK wholesale sales team.

Matt Waterfield, general manager – Middle East and Africa, Friends Provident International Matt is Friends Provident International’s (FPI) general manager for the Middle East & Africa region. He has more than 22 years’ experience of the financial services industry, 20 of which have been spent specialising in international business. Matt began his career in financial services in the employee benefits arena with Capital Plans in the UK, before moving into the individual retail market, initially with Legal & General and then Manulife. In 1991, Matt switched his focus to the global life insurance market and has experience of doing business in several regions including Europe, Africa & the Gulf. With more than 15 years’ experience in the Middle East, Matt established FPI’s regional office in the Dubai Airport Free Zone in 2004. FPI secured a UAE Federal Insurance Licence in 2007 and is now based in state-of-the-art offices in Emaar Square, Downtown Burj Khalifa, Dubai.

Reza Yazdi, head of sales, Morningstar Dubai Reza is the head of sales for Morningstar Dubai. His role is to promote all Morningstar solutions and products in the GCC region, and put into contact the appropriate Morningstar product specialist with the solution that has been chosen by the client. Prior to assuming his current role in 2012, Reza Yazdi was a sales director at Morningstar and based in France. He started with Morningstar in 2007, prior to that he was a sales manager at Standard & Poor’s Fund Services in Paris. Morningstar purchased S&P FS in March 2007. Before joining S&P, Reza was a sales manager at banking software company Mysis Asset Management Systems in France.

Reza holds a masters degree in Finance and International trade.

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PARTNER PROFILES

About Amundi Amundi was formed by combining the asset management expertise of two major banking groups: Crédit Agricole and Société Générale. This partnership reflects the two groups’ shared vision of asset management responding to the new challenges facing the industry and allowing them to serve their clients more effectively. Amundi has a leading position in France and in Europe and has strong growth relays to support its international ambitions. With €692.9 billion in assets under management (end of June 2012), Amundi is one of the world market leaders in asset management

About Friends Provident International Friends Provident International (FPI) is part of the Friends Life group of companies. FPI was established in the Isle of Man in 1978 and has been delivering innovative and sophisticated propositions to a competitive market for almost 35 years. Today, in addition to the Isle of Man, FPI has offices in Hong Kong, Singapore and the United Arab Emirates, enabling the delivery of first class customer service to the local markets, in a language they understand. FPI offers an award-winning range of individual savings, investment and protection products, suitable for expatriates of all nationalities, along with some specialist tax planning trusts. FPI is one of only a few international life companies to hold a full UAE federal insurance licence, which means that their customers and distribution partners have the reassurance of dealing with an appropriately regulated company.

About Fidelity Worldwide Investment Fidelity has been managing assets on behalf of investors in the Middle East since 1976, and has had an office in the United Arab Emirates for 12 years. Fidelity currently manages $232.8 billion for investors worldwide (as at 30th September 2012).

HSBC Global Asset Management HSBC Global Asset Management is a leading global asset management firm managing assets totaling USD409 billion at the end of June 2012. As one of the world’s leading emerging markets asset management businesses, through its network of offices in 30 countries around the world, HSBC Global Asset Management has strong relationships with corporates, institutions and financial intermediaries of all sizes and types. HSBC Global Asset Management offers clients around the world a diverse and full range of active and quantitative investment products including equity, fixed income, liquidity and alternative strategies.

Our objective is to manage focused investment strategies that are responsive to client needs while delivering long-term value.

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PARTNER PROFILES

About ING Investment Management ING Investment Management is a top-20 global asset manager with investment strategies across different asset classes within equity, fixed income, multi-asset and alternative investments. These portfolios are managed across different regions in the world, both developed markets as well as emerging markets with assets under management of US$369.2bn. Moreover ING is the first global asset manager firm to set up local managed investment strategies in the Middle East and cater for the growing global interest in this part of the world. ING Investment Management manages a strong MENA (Middle East & North Africa) equity strategy that is within the first quartile in peer group rankings.

About Morningstar Morningstar provides data on more than 385,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than eight million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and treasury markets. Morningstar also offers investment management services and has approximately $195bn in assets under advisement or management as of September 30, 2012. We have operations in 27 countries.

About Zurich Zurich is one of the world’s largest insurance groups. Our mission is to help our customers understand and protect themselves from risk. With over 60,000 employees serving customers in more than 170 countries, we aspire to become the best global insurer as measured by our customers, employees and shareholders. Zurich has served the insurance needs of customers in the Middle East for over 25 years. Our customers are at the heart of all we do, and we take the time to understand their needs so we can develop products that are right for them and protect their most valuable assets. In the Middle East, Zurich’s business is split into two segments: life insurance and general insurance.

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INSIGHT DISCOVERY PROFILE

About Insight Discovery Founded in 2007, Insight Discovery is a strategic research company which specialises in stakeholder engagement and leadership insights. Existing clients are mainly from the financial services sector and include regional banks, investment banks, asset management companies, insurance companies and private equity companies.

Insight Discovery is behind the Middle East Investment Panorama report, the definitive guide to financial services in MENA. Since 2011, Insight Discovery has published five Leadership Roundtable reports, covering topical subjects such as Beyond the End of Service Benefit and The Role of Women in the Financial Services Sector.

Insight Discovery adheres to ESOMAR’s code of conduct (the international organisation of market researchers). Insight Discovery works closely with Universal Copywriters, a consultancy that works with global investment managers, private banks, institutional banks and publishers of corporate intelligence. It provides a wide variety of commercial writing/ editing and research solutions, www.uniwriters.com.

During 2012 Insight Discovery was recognised as one of the top 50 service providers within the Middle East by MENA Fund Manager. Only two research companies appeared in the Power 50 list.

Further details are available at www.insight-discovery.com, general email address info@insight-discovery.com

About Universal Copywriters Founded in 1998, Universal Copywriters is a consultancy that works with global investment managers, private banks, institutional banks and publishers of corporate intelligence. It provides a wide variety of commercial writing/ editing and research solutions.

Further details are available at www.uniwriters.com.

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INVESTMENT COMMUNITY PARTNER PROFILE

About Zawya Zawya is the leading online business intelligence provider focusing on the Middle East and North Africa, enabling nearly one million professionals worldwide to find and connect to the right business and investment opportunities in the region. With unique content and tools including detailed company profiles, timely aggregated news though Zawya-Dow Jones, leading industry and asset class research, an exclusive online network, and direct access to a team of 100+ experts covering most sectors, Zawya provides its users with the intelligence they need to conduct business in MENA. Headquartered in the UAE, Zawya has physical presence in Saudi Arabia, Lebanon, and the USA. For more information, please visit http://www.zawya.com/about

PUBLIC RELATIONS PARTNER PROFILE About FTI Consulting FTI CONSULTING is a global business advisory firm that provides multidisciplinary solutions to complex challenges and opportunities. FTI Consulting has been present in the GCC since 2003, and was the first specialist financial services PR firm to be based in the Middle East, offering strategic communications counsel to many leading local, regional and international businesses. We have over 3,800 employees based in 24 countries around the globe.

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