Jersey Finance launches landmark study on the global attitudes to Islamic wealth management

Malaysia is highlighted as one of the most favoured trust jurisdictions alongside Jersey, UK, DIFC (UAE), British Virgin Islands.

Jersey Finance, which champions and represents the award winning global international finance centre (IFC) in Jersey, recently launched its landmark study on global attitude towards Islamic finance wealth management.

The groundbreaking study which collated the views of over 2,000 stakeholders in the private wealth sector globally, including from Kuala Lumpur, has some wide-ranging findings relevant for this fast-growing niche sector. For example, along with Jersey and other global IFCs, Kuala Lumpur is highlighted as one of the most favoured trust jurisdictions.

The report outlines several common issues facing the Muslim High Net Worth Individuals (HNWIs) globally such as the transition of wealth from one generation to the next, sustainable finance as well as the need for good corporate governance.

Faizal Bhana, Director for the Middle East, Africa and India, Jersey Finance said: “This study provides unique insights into the evolving needs of Muslim’s high-net-worth individuals all around the world, and highlights what private wealth managers, financial services providers and international jurisdictions need to do in order to meet those needs. With 76% of respondents having explored trusts as an important structure in succession planning, Malaysia, Jersey and other globally recognised IFCs are well-positioned to further support the needs of these individuals. As the world recovers from the pandemic, long-term financial and wealth management is very much needed to open the doors of opportunities for holistic recovery. Jersey, like Malaysia, has a wealth of experience in Shar’ia compliance, succession planning and asset protection, placing us in the top rank for jurisdictions supporting the international needs of Muslim family offices, ultra-high net-worth and high-net worth individuals.” 

Key findings of the ‘Global Attitudes to Islamic Wealth Management’ report include:

• 96% of Muslim HNWIs are actively planning or preparing for wealth succession, with over half (57%) planning to seek tax advice, and nearly two-thirds (63%) seeking Shari’a compliance advice
• The Islamic finance investor base is becoming ever more sophisticated, demanding greater professionalism from financial service providers, whilst continuing to adhere to Shar’ia principles
• Islamic HNWIs are taking an active interest in ESG and ethics in making financial decisions yet over half rely on their own knowledge to do so, presenting an opportunity for private wealth managers to offer more advice and a codified approach to ethical finance
• Venture Capital is becoming an increasingly important staple asset class for Muslims HNWI investors who take a keen interest in early-stage high-growth opportunities in fintech and the digital economy, including in the GCC
• Crypto and digital assets are polarising opinion with a significant majority believing this asset class will become increasingly important in future, but debate in the industry on the Shar’ia compliance of cryptocurrency
• The UK continues to rank as the main staple jurisdiction for Muslim HNWI investors thanks to its legal framework, superior property rights, and inherent compatibility with Islamic law, including for financial transactions and wealth succession. Jersey is favored by Muslim HNW families and family offices for these services, especially investment trusts

In Malaysia, there are positive developments in underscoring the similarities between the principles of Islamic finance and the ESG. Evidently, the increasing traction for responsible investing can potentially serve as a steppingstone for a heightened appeal towards an inclusive and codified approach amongst the HNWI investors. These are essential data points for investors to consider in making informed and strategic decisions as to the way forward in their holistic financial planning.

The report compiles attitudes to private wealth, fiduciary planning and succession by Muslim families, taking into account the views of over 2,000 respondents across the key markets of the UK (London), Asia (Kuala Lumpur), the GCC and Africa (South Africa).