http://www.mei.edu/content/wealth-management-industry-middle-east-boon-or-bust
Policy Advice for MENA Policymakers
How can the Qatars, Libyas and Lebanons of the region (those countries with fewer affluent savers) grow their own affluent, and thus, wealth management industries? The data show that they should encourage local investors to increase their investment time-horizons, particularly to invest locally rather than abroad. In their book Varieties of Capitalism, Peter Hall and David Soskice (2001) argue that economic systems’ labour, product, capital, and regulatory environments must “fit together.” The Middle East generally has labour, product market, and other policies that encourage long-term planning and investing. However, as shown in the left panel of Figure 12, most denizens of their banking sectors focus decidedly on short-term results. The average Qatari, Kuwaiti, or Saudi will want large rates of return in less than 2 years. Their Western counterparts will be content to take a longer-term view — holding investments yielding half the amount desired by the Saudi for almost 3 times as long. Such preferences yield a more “patient capitalism” which has led to long-run growth. Turkish investors tend to have higher expectations for their investments, which is understandable given recent Turkish equity price growth. However, they are also willing to wait twice as long to get these returns.[1] A client who wants to change his or her portfolio every year or two represents one of professional wealth managers’ worst nightmares.
