Strategically planning an IFA business in the UAE requires an in-depth SWOT (strengths, weaknesses, opportunities and threats) analysis and a clear vision and mission statement that will focus the team on driving the business forward.
The UAE is not without its challenges although to not have any corporation, income, capital gains or any other tax does help to fund expansion. The other major advantage, of course, is the light touch on regulation – much of which has been written about. There is no doubt that the lack of any formal regulation helps companies that are looking to expand.
A blessing and a curse
So what are the challenges? The lack of regulation is a blessing and a curse, the former is obvious but the latter less so. What happens if, as is likely, the authorities increase the current bond from AED1m ($272,480) to AED3m ($817,440) – the bond is real money in a bank escrow account assigned to the UAE government and probably never seen again. How many advisory companies want to put nearly $1m into an escrow account where it cannot be touched or borrowed against? How many simply won’t have that sort of loose change? It has already been mooted in the press that there will be mergers and acquisitions in the sector as the small company cannot survive.
And what happens if the authorities say to all advisers you can no longer advise in the UAE tomorrow if you do not have the CISI UAE Financial Rules and Regulatory exam?
This paper requires an understanding of UAE Federal Law No.4 of 2000, including knowledge of money changing, securities and commodities, stockbroking, listing of Islamic bonds and all the regulations appertaining to these categories operating in the UAE. This has little to do with financial advice to a UK expatriate.
Would you be challenged if you were suddenly forced to stop working because you had run foul of the Labour or Immigration law? What if you didn’t understand the Arabic-written fax that came through two months ago was demanding your presence at Dubai Court over a dispute and you missed the appointment? Or your landlord just increased your rent by 25% because he could.
Living and working in a Middle Eastern country has hundreds of similar challenges and yet it is very easy to get sucked into the idea you are British and running a British company. Recently, I had to go to the British Embassy to get some papers attested and I had to wait on the pavement and conduct my business through a glass window.
Outgoings, going, gone
We don’t pay taxes but we pay massive sponsorship fees to our local partner who owns 51% on paper, a full-time Arabic-speaking British executive to handle our legal and personnel issues, outsourced PRO company to handle all immigration and labour issues, a contracted law firm who understands our business to represent us, and two Arab receptionists fluent in English, Arabic and French to act as both gatekeepers and informants. Then we have to have the (nearly) $1 million bond locked away.
Good to SWOT up
So when we look at putting our strategic plan together for 2014 we make sure we have looked very closely at the threats of the SWOT analysis.
The rest is easy – get the best advisers from the UK, get your marketing right, invest in the best offices and IT infrastructure, employ a team of 80-plus back office and marketing staff, create a way to ensure your advisers have enough appointments all the time, identify your goals, measure your performance against plan and then make it work.
There are over 100,000 millionaires in the UAE and even more in Saudi. There are 250,000 British people before we even look at the one million others we can sell to, and there are simply nowhere near enough advisers – so all you need to do is work.
