Three months on GWM’s chief commercial officer, Mike Coady, explains the thinking behind GWM Corporate Solutions:
Guardian Wealth Management are among a number of companies in the international space that have been moving in this direction, and we see it as part of a general up-skilling that is taking place at the top level of the international advisory market.
It is also, for us, a natural follow-on from our decision, made some years ago, to hire only qualified advisers, typically from the UK. This has resulted in a significant number of chartered advisers and qualified fellows on our team, and this in turn expands the range of business areas we, as a company, are able to advance into, with authority.
The launch of GWM Corporate Solutions coincides with a growing global shift away from the traditional expat employment standards by growing numbers of employers, and at the same time, a ramping up in the UAE of regulations that layer new responsibilities onto the companies our clients typically work for, which they previously were not required to comply with.
The requirement that employers must provide health insurance for all of their employees, which is coming into force this year in this market, is an example of something the local outposts of multi-national companies, as well as small- and medium-sized enterprises based here, didn’t have to deal with in the past.
The result is that these companies are having to handle matters on behalf of their expatriate staffers that previously were either included in their gold-plated expat contracts, or, like the new health insurance regulations, didn’t previously exist.
For companies like Guardian Wealth Management, the move into corporate services is taking place virtually seamlessly.
This is because our clients have always been people who, in their professional lives, are expatriate senior executives in their respective professions – bankers, lawyers, construction industry top management, hospitality industry management etc. It has been they who have been coming to us, with questions about corporate matters that, until recently, they never would have been asking.
At a time of tremendous change in the international advisory marketplace, I’m sure I don’t need to explain why the opportunity to bolt on an entirely new area of business, which corporate financial services represents for us, might be embraced.
The soaring number of small- and medium-sized business start-ups in the UAE provides further proof there is an important role for GWM Corporate Solutions to play.
According to Dubai SME, part of the Dubai government’s Department of Economic Development, more than 22,000 small businesses were established in Dubai in 2015, in spite of the market headwinds that year; this was said to represent an 18% increase over the previous year. Estimates are that the 2016 figure could be even higher.
Other data we’ve seen indicates that SMEs currently account for 42% of Dubai’s workforce, indicating as we see it, that there is a clear market for specialist advice for small- and medium-sized business owners in the region.
Although some of their needs may be very different from those of the lavish, glitzy Gulf outposts of some of the European multi-national corporations we will be looking after, in most ways they will be very similar, and GWM Corporate Solutions consultants will be able to look after both types of business client, just as our personal advisers are able to advise individuals who work for small and medium-sized companies as well as large ones.
What we’ll be able to offer these SMEs will be advice on matters they may not even have been aware of; for example, the importance of planning for what might happen if their business partner in their UAE business, say, were to die.
They probably won’t be aware, until we tell them, that if one’s business partner in a Dubai business happens to die suddenly, unless
other arrangements are made, all of the deceased’s shares in the business would not automatically go where they, or the deceased’s surviving partner, might have thought they would go, or would have wished them to. Another scenario might be that you had a company that was six weeks from bringing out a new computer app, then all of a sudden the developer fell ill, or died, and you couldn’t deliver on a million-pound contract for that app that you’d already agreed to.
Planning for such situations is very normal in markets like the UK, but it isn’t, yet, that common in overseas markets like the UAE, where, as it happens, inheritance rules are also generally very different from what many Europeans are accustomed to.
Nevertheless, most people who set up companies in Dubai do so very quickly, and these businesses often tend to grow very quickly – which is why it is all the more important for matters like this to be planned out from the beginning.
The End of Service Gratuity is another, classic example of the sort of thing that advisers looking after individual clients in the Gulf don’t normally come across, except perhaps when their client is about to return to wherever they’re from and is due to receive it, which GWM Corporate Solutions would be well-equipped to help corporate clients in the Gulf to deal with.
For those who aren’t familiar with it, this gratuity is a statutory severance payment that functions a bit like a pension scheme, in that it is given to employees when they leave, with the amount being based on how long they’ve been with their Gulf employer, and at what salary.
Because it is unique to the Gulf, even major corporations setting up here for the first time from elsewhere may discover the existence of this gratuity regulation only when someone prepares to leave their company, and asks them about it.
When that happens, a lot of the executives running these Gulf offshoot businesses really don’t know who to turn to – and this is where we can come in.
Although it’s still early days at GWM Corporate Solutions,
we’re already finding that the two operations – personal financial advice and
corporate advice – complement each other like a two-way road.
However, one thing that is very important to us at GWM – and an area in which many other companies make a mistake, I believe – is that we think these two areas should be handled separately. We do not believe your individual adviser, who looks after the personal financial planning of clients, should also be involved in corporate financial planning.
For this reason, we’ve developed two different models, for each type of business. So if you’re a personal financial planner at Guardian Wealth Management, you cannot then just pop into a company’s offices in the afternoon, and give corporate advice. Because we see it as a completely different skill set – which it is.
Another facet of all of this is what we call “at retirement” advice, which is
typically paid for by the employer, but which is all about employee education.
This is an area I’ve had personal experience with in the past, as one of my previous roles was as chairman of UK-based Workplace Solutions, which helps multi-national employees to prepare for their retirement. This is an area that is getting a lot of attention in many developed markets, but not so much, yet, in offshore markets, such as the UAE.
It is hugely important, though, as companies cut back on their defined benefit schemes and otherwise reduce their pension contributions for cost reasons, for people to start planning for their retirement at an early age, and do it properly.
Back home, the HR departments of major companies are discovering that because the pensions being provided are increasingly inadequate, they’re going to have a higher population of ageing people on their staff who won’t be able to afford to retire, and that is going to be a problem for all concerned.
With this said, retirement advice is certainly another area we are planning to go after in our new GWM Corporate Solutions operation, with a range of options available for different employee age groups and salary levels.
GWM Corporate Solutions provide services such as shareholder protection, key man insurance and business loan protection to business throughout the UAE.
Article originally published by International Investment Tuesday 27th June 2017