Bank Sarasin is urging investors to take a stronger focus on Islamic financial planning strategies in a way that minimises risk and maximises client opportunities amid volatile markets.
In its recently-released Islamic Wealth Report, the bank encouraged the Islamic banking community to further develop the Shariah framework, diversify products, and differentiate offerings. The report opens by explaining the required approach to Islamic financial planning before focusing on the key areas of philanthropy, the family office service, mutual funds, and sukuk, before concluding with an insight into the bank's current economic outlook for 2011.
Islamic financial planning, according to the bank, is a religious obligation requested in the Qu'ran and involves the acquisition, preservation, and philanthropic distribution of wealth. For instance, the Islamic requirement to distribute part of acquired wealth is a key driver for philanthropic giving in the GCC region, where annual giving has already been estimated to be as high as $50 billion.
"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, the head of Islamic finance for Bank Sarasin.
Also included in the report is the management of the Islamic wealth cycle vis-a-vis the required balance between spiritual and worldly obligations, the understanding of issues faced by Waqf donors, the sustainability of the Swiss private banking family office structure as a wealth management tool, and the standardisation, education, and diversification of sukuk, among others.
The Sarasin Group became fully committed to supporting the Islamic banking industry with the introduction of a comprehensive Islamic wealth management service in November 2009. The division is headed by a Shariah board.