Bank Sarasin is urging a stronger focus on "Islamic Financial Planning" in the wake of its second annual Islamic Wealth Management Report, which aims to provide investors with an in-depth overview of developments in the Islamic wealth arena in 2010.

The report for 2011 has found that the Islamic banking community needs to take a stronger focus on this aspect of Shariah finance, which is defined as “managing the Islamic wealth cycle through the entire process of wealth acquisition, preservation and distribution, and achieving the required balance between spiritual and worldly obligations.”

“Islamic Financial Planning is largely neglected by the Islamic banking industry. It requires a detailed process, as well as structures and products to ensure Muslim investors are fully compliant with Shariah law,” said Fares Mourad, head of Islamic finance at Bank Sarasin.

The firm is also calling for the industry to move forward by developing the Shariah framework by “diversifying products and differentiating its offerings” and by noting that growth in the industry will require innovation and greater transparency.

Another key finding by the report was the increase in philanthropic giving in the GCC region (Kuwait, Saudi Arabia, the UAE, Qatar, Bahrain, and Oman), attributed to the Islamic requirement to distribute part of acquired wealth. Annual philanthropic giving in the GCC is estimated at $50 billion by the report.

Other key challenges and opportunities of the Islamic wealth world addressed in the report are:

- Philanthropy: understanding the primary issues facing Waqf donors despite the strong growth drivers in this market. The report notes that poor performance is due in part to the shortage of professionals, leading to low-quality asset management and a lack of transparency.

- Family Office: considering the suitability of the Swiss private banking family office structure as a wealth management tool to ensure effective Islamic governance.

- Mutual Funds: addressing the challenges facing Islamic mutual funds to achieve growth and performance.

- Sukuk: recommending standardisation, education and diversification of Sukuk in order to increase the supply of products and the liquidity of the market.

The Sarasin Group introduced an Islamic wealth management service in November 2009.