The growing importance of servicing the needs of the wealthy Islamic market was highlighted at a conference on Islamic wealth management hel...

The growing importance of servicing the needs of the wealthy Islamic market was highlighted at a conference on Islamic wealth management held last week in Geneva. The conference delegates were united in their enthusiasm for developing services for the rapidly growing market of Islamic wealth management. However, they realised that to succeed it was necessary to make the effort to understand the principals of Islamic Finance and develop products and services accordingly. Dr Humayon Dar, vice president Dar Al Istithmar, said that it is necessary to obtain a Fatwa, certificate of authenticity in terms of Sharia compliance before a product can be successfully sold as an Islamic one. His company, a joint venture between Deutsche Bank, Russell Wood and Oxford Islamic Finance, specialises in making such arrangements that can be complicated and costly for newcomers to this market. According to John Sandwick of Encore Management in Geneva, the Islamic Financial Industry was worth $250 billion in 2004. The market has no specific geographical location, but is predominantly centred around the countries of the Arabian Gulf, where growth has come from a transfer of wealth from the state to the private sector; other major markets are Turkey, Indonesia, Iran and Malaysia. About 10 million Muslims reside in Europe and 10.4 million in North America. Even China, which has a large Muslim population, is expected to become a market for Islamic wealth management in the future. Delegates at the conference said the demand for Islamic financial services is customer driven and it is expected that 50 per cent of Muslims will use Islamic banking for their savings in the coming 8-10 years. In 2003 the global net worth of rich individuals was estimated at $ 28.8 trillion of which $ 1.18 trillion was held by Muslims. Islamic banking has seen an annual growth rate of 15 per cent in recent years. This has been boosted by the transfer of institutional funds into Islamic banks particularly since the events on September 11 2001, when substantial funds were repatriated to Arabian countries. Mr Sandwick believes there is around $200 billion of Muslim assets held in Switzerland, but doubts if there are any Swiss bankers properly equipped to serve Muslim clients. The challenge is to adapt to this important and rapidly expanding market, he added.