David Hughes is the head of Pic Dubai, part of the deVere investment advisory group that has US$8 billion (Dh29.38bn) under management. Here, he gives his views on savings, the work/life balance and the expat package.
UAE residents aren't saving enough, we heard recently. What's your take on that?
I totally agree. However, the focus on people saving money has certainly improved compared to the "earn it, spend it" approach people seemed to have in the UAE a few years ago. That said, many are still getting carried away with the huge social scene open to them and falling for the 'next month I will make a concerted effort' approach. If you were to ask people why they came to Dubai, the top three answers we receive are: job opportunity; tax-free earnings; and the weather. Often, six months, or even a year later they have excelled at work and created themselves a superb network of social contacts but rarely are they committed properly to taking advantage of the tax-free income. Knowing people usually come here with a two to three-year plan and then "see what happens", this obviously means a good percentage of that has passed and they rarely have hit the financial targets they came here with. The earlier you start saving, the better.
What kind of investment/savings are most suitable for expats in UAE?
Firstly, are they global? This includes both the investment plan and the company they are using. Unfortunately, we regularly meet clients who have invested in Hong Kong, for instance, and have done so with a company that only has a local presence. This can seriously restrict service and communication once they have moved on. With the UAE being as transient as it is, this must be a major consideration. Most of the larger advisory firms provide global products even if they cannot offer global service. Another consideration would be the currency in which they are saving. The vast majority of investments that take place here are denominated in US dollars. This is fine if you intend to stay in the UAE for the term of the investment but many will not. Let's say, for example, a British client was offered a further opportunity by their company to move from the UAE to Munich. This client must now think about the fact they will be advised in the UAE, paid in euros, saving in US dollars with the likelihood of wanting to mature the investment in sterling.
You are part of deVere, an international organisation. Talk me through the strategy.
At Pic and the deVere Group we try to offer an independent view on the client's individual financial needs. As an additional value-added service, we have worked with major institutions to put in place strategic alliances, with big names like Morgan Stanley, JPMorgan and just recently Goldman Sachs. Such strong relationships allow us to give our clients the ability to access opportunities that are backed with global expertise and understanding.
How attractive is the UAE in the minds of UK expats looking to move abroad?
Still very attractive, I feel. What do people living in the UK usually complain about? The weather, the tax and the lack of opportunity. The UAE obviously suffered like most countries when the financial crisis hit but slowly the roads are getting busier, the schools are back to capacity and companies are expanding. The chance to earn more money than in the UK without paying tax for doing a job with better prospects, all while the sun shines - this has got to be an attractive option. Although I will always love the UK and I am proudly British, right now I feel I am in the right place for work, my family and also for my children's education and so do most of the people we meet.
What other places do Brits view favourably?
The destination people choose is generally driven by the balance between lifestyle and work. Some will go wherever an opportunity takes them [regardless] of the lifestyle, they are there purely to work. Others, often people with families, need the balance of a good enough opportunity to make it worthwhile, while remaining suitable and safe for their family. In Asia, Hong Kong still draws huge numbers of British expats as does Singapore. In Europe, people are still going to Geneva and Zurich for employment. Alongside the UAE, Qatar is also considered a popular destination in the Middle East.
There was much talk after the crisis that the "expat package" - job, house, car, medical care, beach club - was dead. What's your view now?
The expat package at one point disappeared as quickly as the expats that had them. However, we are now finding that more and more clients new to the UAE are able to negotiate improved rent and education packages. This is good news. It shows that employers here have the ability to offer more than they did.