Shariah-compliant Banking Services
Wealthy Muslims are particularly keen on Shariah investment, which is free from ribah (interest). Many private wealth management clients feel they want to give something back to the world by supporting the neighbourhoods they grew up in, the cities where they live or society at large. Others want to ensure that their wealth continues to be an asset to their family, rather than ever becoming a liability. Initiatives to address this issue are delivered through wealth with responsibility programmes.
Shariah-compliant investment instruments aim to meet a number of financial situations, which may involve business assets, personal assets or both. They are characterized by discretion, professionalism, attention to detail and a high level of expertise in the Islamic finance area.
Shariah-compliant investments are available in countries all over the world. The range of specialist services provided varies from country to country and depends on local conditions and prevailing taxation and legal regulations.
Trust administration establishes various types of trust with confidence – from inheritance trusts to charitable foundations. An Islamic fund manager relays expertise in this specialist field. Trusts can represent one of the most tax-efficient ways to preserve the value of assets. Trusts can be used for a variety of purposes, such as passing wealth onto successive generations or establishing charitable foundations. Effective trust planning, management and administration can be an extremely complex matter, so specialised advisor is required to plan, implement and manage high-value trust funds for years to come. The independent advisor is also a significant philanthropic trustee in administration through the global foundations designed to address major social and cultural issues.
Shariah-compliant investment fund managers protect and secure the business and its assets for transfer to the next generation of management, and seek to maximize the returns it can generate, according to Shariah inheritance law.
Families of considerable net worth often maintain an array of holdings – from real estate and business assets to trust funds and other investments in many different countries. Supervision of these assets has often been delegated to portfolio managers and is sometimes almost as diverse as the assets themselves. Family office services aim to consolidate matters by providing an overview of the performance of the assets.
Arranged for the inheritance purposes of more advantaged families, estate, inheritance and gift planning aims to see that all individual and charitable beneficiaries receive an optimum legacy, according to Shariah inheritance law. The first priority is likely to be providing for personal dependants, and there may also be a wish to endow charitable bequests or establish philanthropic foundations. All inheritance and gift issues require careful planning and depend upon the country they take place in. Planning can help minimize tax liabilities and ensure that the assets maintain their value so that they can continue to meet the demands placed on them, both now and in the future, and it is an inheritable asset according to Shariah, and therefore is subject to the rules of Zakat (charity tax).
The Islamic fund manager exists to help put the assets of the wealthy to use for the greater good, and to establish a culture of responsibility among the client’s heirs and successors. The surplus of the person’s needs have an element of Zakat and it has to be calculated and paid annually to the needy .
The wealthy usually want to protect and secure their private business for transfer to the next generation and manage their assets more effectively. Private business is often the source of individual wealth, which means that emotional as well as financial issues can be involved – issues that diplomacy and experience can help resolve. Appreciating the close interdependency that often exists between private business and personal wealth requires careful balancing between the two.
Private bank wealth management should work closely with several leading independent financial advisers (IFAs) to help them provide advice, products and services to wealthy clients. Private wealth management also helps IFAs to address client needs through the discreet provision of back office support functions.
Based on their chosen asset allocation strategy in compliance with Shariah law, the client should have access to a wide range of investment products, including some developed for institutional clients that are not usually available to private investors. Fund managers also recommend carefully vetted and approved products from third-party providers. A brief overview of the investment opportunities offered and available from country to country needs to be presented, and it should be noted that not all investments are suitable for each investor.
With their access to cash deposits, stocks and bonds in all the major global markets, bonds are inheritable assets according to Shariah.
Open architecture provides access to the world’s leading fund managers, with thorough vetting and selection of individual funds by our experts. Surplus funds are inheritable according to Shariah, so Zakat responsibilities must be fulfilled.
These protect assets and maximize returns with specialised foreign exchange strategies and commodity investments such as precious metals and oil. The value of the surplus is inheritable according to Shariah.
These provide attractive risk-adjusted returns, absolute positive returns and significant diversification of traditional portfolios.
Investing in funds that back private companies can offer greater potential for growth, and it is an inheritable asset according to Shariah and is therefore subject to Zakat regulations.
Investment in property markets on a global scale is inheritable according to Shariah, and also as an element of Zakat, has to be calculated and paid annually to the needy.
These should be available to the client to leverage his portfolio, or take immediate advantage of investment opportunities as they arise, without having to liquidate other assets.