Financial Services in Dubai
Dubai itself is recognised as an area of significant wealth and as such has attracted business people from around the world and some of the largest companies on the planet. However, what do we really know about financial services in Dubai and the people who are servicing client needs?
Background to the thread
The truth is that the financial services sector in Dubai is very different from that for example in the UK from both a personal side, culture site and regulatory side. This post was started by somebody looking to move to Dubai for employment in the financial services sector with an interview lined up, although concerns about the difference between the UK financial services sector and the Dubai financial services sector.
Thankfully one poster, at least so far, has significant experience in the sector and has been able to give specific advice on the sector as a whole and companies operating in Dubai.
Financial qualifications in Dubai
From afar it is easy to assume that the Dubai financial sector is heavily regulated and offers significant protection for investors. However, unfortunately it appears that the sector is relatively immature and as such the regulatory framework covering qualifications for those working in the sector and protection for investors is very different from that in the UK.
It is interesting to see the vast array of well-known financial companies who have targeted the Dubai financial sector, obviously attracted by the money, and while we have no official confirmation it looks as though many of these companies do insist upon UK style qualifications before taking on new staff. However, it also looks as though many companies, referred to as “cowboys” in the post, may not have such high standards.
Savings plans in Dubai
The original contributor to the thread has an interview arranged with Royal Skandia in relation to a position in the savings plans sector. Whilst to some people his 10 years experience in the UK regarding offshore bonds may seem a little irrelevant it is in fact probably very similar to the position he will be taking up in Dubai if successful. There is an interesting comment suggesting that in Dubai you could be a double glazing salesman one-day and an IFA the next, such is the lack of regulation for those working in the sector.
However, there is also reference to a colleague who moved over to Dubai some time ago with another well-known company and does not foresee himself ever returning to the UK. This would suggest that there is, even in these times of economic heartache, significant money and many opportunities to succeed in the Dubai financial market.
Cultural differences
As many Western-style companies moved into the Dubai financial markets they brought with them many Western-style savings and investment vehicles. A number of these were relatively unknown before the market started to take off and as such there appears to be a high degree of “hand holding” while trying to close a sale. That’s not to say that Dubai investors are any less intelligent than those in the UK for example, but more the fact that the type of savings and investment bonds being sold are relatively unknown.
Unfortunately, while this particular environment offers excellent potential for the more structured and regulated operations in the region it has also been a breeding ground for so-called “cowboys”. The “here today gone tomorrow” businesses have tarnished the reputation of the sector as a whole and while the Dubai authorities are continually trying to address these issues it will take time and there will be ups and downs.
Working in Dubai
The general culture of employment in Dubai is very different to that in the Western world with sales often taking longer to conclude and many salespeople being given the “run-around”. While this may seem a little unfair it does appear, especially from the comments on the thread, that closing a sale in the Dubai financial sector is more difficult than that in the UK. Then again, the working culture and investment culture in Dubai is also very different to the UK which is something that has attracted significant numbers of people.
It is unfair and unreasonable to expect a foreign land to incorporate your own work ethics, work culture and ultimately a financial sector such as the UK like-for-like. While there’s no doubt that the UK offers a very sound and interesting base on which to build the Dubai financial sector there are also many other factors to consider.
The future of financial regulation in Dubai
The financial market as a whole is highly likely to take a similar path to that trodden by the Dubai property market. The initial influx of foreign investors, foreign companies and foreign workers has already begun (and in many areas began some time ago) although in reality the regulations are nowhere near enough to control what is and has the potential to be a substantial market.
The problem we saw in the property sector was the fact that the authorities appeared to make regulations on the “hoof” and the unknown is something which will strike fear into the financial markets and financial companies. Although highly likely to change in relation to regulations for the financial sector, many people believe that the financial companies prominent in Dubai need to discuss their requirements, investor requirements and regulatory requirements with the authorities on a regular basis.
Conclusion
The fact that the person who began this thread almost immediately had a reply from somebody with in-depth knowledge of the sector shows how popular finance in Dubai has become. We all know that Dubai has significant investment potential and while the financial sector has grown substantially over recent years there is still much further to go. However, those from places such as the UK who have significant experience and recognisable qualifications are in danger of being tarnished with the same brush as those unqualified and operating in Dubai.
There will come a point, unless the authorities introduce significant regulatory restraints, when the giants of the worldwide financial sector may think again about investing substantial funds in Dubai in the future. They need to offer their staff, shareholders and customers a regulatory environment in which all parties are covered and all operations are regulated. We should see this emerge on a continuous basis in the future but whether it will be quick enough to protect today’s investors from the “cowboys” remains to be seen.
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