UAE investors are failing to take appropriate professional financial advice when planning their investments, according to the latest Friends Provident International (FPI) Investor Attitudes Report.
The report shows that alarmingly almost half on dents have never sought advice on financial planning from a UAE based financial adviser or insurance broker.
Perhaps more worryingly, the report shows that an even higher proportion of respondents (47%) do not have any life and/or critical illness cover in place, whether provided by their employer or arranged personally.
The investor attitudes index for the UAE has remained stable at 15 points, just three points below its highest ever level. The indices for Hong Kong and Singapore have jumped considerably this wave and now stand at 15 and 17 points respectively.
Matthew Waterfield, General Manager, Middle East & Africa at Friends Provident International said: “The stability in the Friends Investor Attitudes Index for the UAE reflects the growing confidence among UAE investors in their local market. Unlike Hong Kong and Singapore – where both the index and investor sentiment seems to fluctuate from wave to wave of research – UAE investors generally are demonstrating a balanced, longer term approach to their investment planning, and do not appear unduly worried about short term market fluctuations.
“I am however concerned that a large proportion of UAE investors do not take suitable professional financial advice and this finding is reaffirmed by the fact that so few respondents have life cover, or cover against critical illness, in place. I would urge anyone living and working in the UAE – regardless of their household income and family situation – to regularly seek professional advice, aligned to their current situation, attitude to risk and investment time horizon – to ensure they are making their money work as hard as possible, and to discuss their protection requirements.”
Interestingly, in terms of asset classes, the preference for investing in property now stands at its highest ever level, with a score of 17- having started at -2 in the initial wave of research (Q2/2010).
The preference for investing in collectibles has rebounded this wave, and now stands at 7; having dropped from a high of 10 points in wave 6 to a low of just 2 points in wave 7.
In terms of investment strategy, the percentage of investors planning to invest for more than three years has fallen from 31% in wave 7 to 28% in this wave. At the same time, the number of investors not investing due to market uncertainty continues to decline and this now stands at just 7% – the lowest since the investor attitudes research began.
Confidence in both the current and future UAE investment market has improved significantly, with 44% of respondents viewing the current market as an improvement on the market six months ago. Only 16% of respondents think that the current market is worse than six months ago – again the lowest since research began (Q2/2010).
For this wave of research, respondents were asked about the actual investments they are currently holding. Unsurprisingly, gold and cash featured high on this list. Perhaps less predictably property was sandwiched by these asset classes.
Matthew Waterfield commented: “It is pleasing to see the improvement in the preference for investing in property – both in theory and in practice. This, coupled with the reduced number of respondents choosing to sit out on investing, and the improved sentiment towards the current and future markets, is a clear indication of an overall improvement in investor confidence in the UAE market. Again, I would urge investors to take suitable financial advice to ensure they make the most of the opportunities available.”