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Only 10% of non-resident Indians (NRIs) living in the United Arab Emirates have invested in a pension, according to research from Standard Life.
The savings and investments company said it studied the saving, spending and investment behaviour of nearly 300 NRIs across the UAE in order to compile its NRI Wealth Study.
Standard Life, which opened its first UAE office in Dubai last year, said one of the most striking findings was that “family expectations” still played a huge role in retirement planning, with 75% of respondents expecting to be cared for in retirement by their children.
The company said its research also revealed that 26% will return to India after retirement, while 24% will retire in a third country and 22% plan to continue working in retirement but in a third country.
Chris Divito, chief executive of Standard Life International’s Dubai branch said: “NRIs are seen to be a family oriented community who rely much on their children and family for their retirement years.
“This is simply amazing from a family bonding perspective, but it is always advisable to take professional financial advice when it comes to retirement planning. With 75% of respondents having three to five financial dependants, there is greater strain of finances and therefore a prudent approach to financial and retirement planning is highly recommended.”
The NRI market has long been attractive to advisers in the UAE, with some firms such as Nexus Insurance Brokers – the largest advisory firm in the UK – building a strong reputation in serving this field.
According to statistics provided by Nexus chief executive Mahmoud Nodjoumi, the UAE workforce is made up of four million foreigners, of which around half are NRIs.
Another advisory firm which has recently announced its intention to more actively target the NRI market is Dubai-headquartered Mondial.
In March, the company announced a joint venture with a Mumbai based brokerage, Padmakshi Pvt, which will provide wealth management services to both the Indian domestic market and the NRI market in Dubai.
Commenting on the research, Mondial chief executive Sean Kelleher said it is true that Indians and NRIs “remain extremely conservative and slow to change”.
“Yes, the family expectation that sons and daughters are your future pension income remains embedded. Our sales-side skills therefore needs to address this, which can be tough with the older generation,” said Kelleher.
“It is easier with the youth as you build conversation about the size of the NRI Diaspora and wonder whether the new government of the Diaspora will look after the future to the same degree as the family at home; the trend of rural to town living and its effect on family size and future financial planning; and the increasing independence of the youth and of women.”