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In its second annual
Islamic Wealth Management Report, Bank Sarasin urges the
Islamic banking community to take a stronger focus on
Islamic Financial Planning. Bank Sarasin also calls for the
industry to move forward by developing the Sharia framework,
diversifying products and differentiating its offerings.
Islamic Financial Planning, a religious obligation requested
in the Qu’ran, involves the acquisition, preservation and
philanthropic distribution of wealth. It is a religious duty
that Muslims must have a will, so proper Estate Planning is
required, often including a trust structure.
Bank Sarasin’s Islamic Wealth Report 2011 provides investors
with an in-depth overview of developments in the Islamic
Wealth arena in 2010 and explains how best to manage assets
according to religious requirements. This approach
exemplifies Bank Sarasin’s aim to minimise risk and maximise
opportunities for its clients, a key objective in today’s
volatile markets. This year’s 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 Bank Sarasin’s current economic outlook for
2011. The Report also notes that the Islamic requirement to
distribute part of acquired wealth is driving philanthropic
giving in the GCC region (Kuwait, Saudi Arabia, UAE, Qatar,
Bahrain, and Oman). Annual philanthropic giving in the GCC
is already estimated at as much as USD 50 billion.
Fares Mourad, Head of Islamic Finance, Bank Sarasin & Co.
Ltd
"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 Sharia law. We are proud to have
extended our holistic approach to offer a comprehensive
Islamic wealth management service."
The key challenges and opportunities addressed in the Report
are:
•Managing the Islamic wealth cycle through the entire
process of wealth acquisition, preservation and distribution
and achieving the required balance between spiritual and
worldly obligations.
•Understanding the primary issues facing Waqf donors despite
the strong growth drivers in this market: poor performance
is due in part to the shortage of professionals leading to
low quality asset management and lack of transparency.
•Considering the suitability of the Swiss private banking
family office structure as a wealth management tool to
ensure effective Islamic governance.
•Addressing the challenges facing Islamic mutual funds to
achieve growth and performance.
•Recommending standardisation, education and diversification
of Sukuk in order to increase the supply of products and the
liquidity of the market.
•Analysing Islamic equity and indices performance over the
last year to illustrate that diversification remains key for
investment without compromising Islamic principles.
In November 2009, the Sarasin Group introduced a
comprehensive Islamic wealth management service offering the
full spectrum of Sharia-compliant private banking products
and services: estate and succession planning, financing and
asset management, including money market and structured
products such as Wakala, Murabaha and Maraya. To support
this service, a dedicated department with high level
expertise and a renowned Sharia Board ensure the high
quality service that clients have come to expect. The
Sarasin Group has created a tailored service that enables
its Islamic clients to have the forward-planning tools,
processes and products necessary to ensure that they are
meeting their obligations under Islamic law.
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