The emergence of Asia as the world’s most attractive growth region is definitely impressive, as it comes at a time when most international markets are still struggling with the aftermath of the credit crunch. Fuelled by rising levels of industrialisation, the resulting shifts have been significant with population wealth reaching a record level and the rising of various Islamic financial centres.
The Islamic banking and finance industry has seen a rise in the growth of Islamic wealth management sector due to the significant demand asIslamic assets continue to provide an attraction for global investors looking to expand their portfolios. There are various sectors for Islamicbanks to offer wealth management solutions that come under the principles of Shari’a . Some of the main Islamic banking and financial global hubs of the world include Malaysia, Indonesia, Qatar, Saudi Arabia, UAE, Turkey and many more. These hubs offer various Islamic banking and Takaful services which cater for managing wealth according to the Shari’a. Some of the well reputable wealth management companies are situated in global Islamic hubs. This is definitely a good news for Muslims around the world who are encouraged to invest only in assets that are in compliance with the Shari’a law. And as there is no prohibition in Islam about doing business with people who are not of the same faith, this should be a good news as well for the non-muslim investors. Investors, muslim and non muslim are welcome to tap into the wide range of investment opportunities and incentives offered by these Islamic financial hubs.
The rise of Islamic wealth management, in Shari’a compliant hubs are due to the various services offered. The funds from an investor can be invested in various different Shari’a compliant investment sectors to meet the expectations of the investor and follow the principles of risk sharing as outlined by the Shari’a law. The pyramid of Islamic wealth management services, outlined by Sarasin-Alpen indicated options which are available for customers, from trusts to the murabaha financing options. Global Hubs contributing to Islamic Wealth Management. There are many global Islamic hubs such as Malaysia which have contributed significantly to the rise of Islamic wealth management and continue to do so. The real factor is that knowledge is acquired and discussions and events are created to further enhance the sector. One example of this is that leading Malaysian organisation, INCEIF – the Centre for Islamic Wealth Management organised an Islamic Wealth Management Symposium , to discuss the role of Islamic wealth management and other factors which contribute to its global presence. Events such as conferences and symposium can only further spur the success of Islamic wealth management not only in Asia but also around the world. The Islamic wealth management,sector is set to prosper with many predicting that the global Islamic assets are to hit 1.6 trillion US dollars by 2018. In addition there are a number of various sectors that the global Islamic financial hubs are contributing to such as investments in Sukuk, Takaful, infrastructure, energy and resources, agriculture and many more diverse sectors are further helping the industry to gain momentum.
In conclusion, the success of the Islamic wealth management sector is largely dependent upon the continued success of investments made in a Shari’a compliant manner. Malaysia accounts for a significant proportion of Islamic global assets as does the UAE. Islamic banking assets with commercial banks has a CAGR of 19.7% according to Ernst & Young World’s Competitiveness Report which shows a significant opportunity for the Islamic wealth management sector to further prosper and grow at an unprecedented rate around the world. Various Islamic countries have recognised that there is considerable unrealised demand for Islamic financial services, which would require that the supply of Shari’a-compliant products and services be increased, and that financial inclusivity be expanded. In moving forward, there are three major areas for future cooperation, namely, development of Islamic financial instruments and markets, improving perception and enhancing awareness, and talent development and capacity building.
There are a number of various sectors that the global Islamic financial hubs are contributing to such as investments in Sukuk, Takaful, infrastructure, energy and resources, agriculture and many more diverse sectors are further helping the industry to gain momentum.