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Opportunities abound for wealth managers in Turkey, says report

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Turkish business families are shifting attention toward planning for the future and implementing strategies to create cross-generational legacies, according to a report from UBS and Campden Wealth.

The Turkish Entrepreneurship Report reveals that the country’s business leaders are optimistic about Turkey’s prospects, with 88 per cent of participants planning to expand domestic operations.
 
More than 90 per cent of participants expect to fund their business development with internal cash flows, with almost 60 per cent saying they also plan to raise debt.
 
Half of Turkish entrepreneurs surveyed currently have more than 75 per cent of their total wealth invested in their business, allocating the remainder to real estate holdings and investment-grade fixed income securities. Those remaining Turkish entrepreneurs, who have divested more than 25 per cent of their wealth from the operating business, have invested predominately in real estate, private equity and liquid deposits.
 
Local banks are held in high regard: more than 80 per cent of participants have accessed capital from local banks within the last 12 months, compared to 29 per cent using international banks.
 
A shift emerged in the wealth management plans among 3rd and 4th generations, who place higher value on formal wealth management and sound governance structures than their predecessors, viewing both as steps toward solidifying the economic gains made by their predecessors over the last few decades. Almost two-thirds of next generation participants use wealth management services regularly, much more than the overall participant average of 50 per cent.
 
Eighty-five percent of this group rate ‘trust’ as the most important criterion for wealth management advisor relationships. While ‘trust’ is a key factor across generations when selecting wealth managers, the next generation gives ‘investment track record’ equal importance, twice the rate attributed by older generations.
 
Coupling higher rates of educational achievement with international travel experience, the next generation of Turkish wealth builders appear primed to adopt more sophisticated business and wealth management mechanisms.
 
"The findings suggest a shift in how wealth is managed in the country, which creates the opportunity for global wealth managers and family office service providers to tap into the market by focusing on the next generation of Turkish wealth builders," says Dominic Samuelson, CEO of Campden Wealth.
 
While the economy is forecasted to grow by four per cent over the next two years, the next generation of Turkish wealth builders face a host of macroeconomic challenges – including a current account deficit, high interest rates and a weakened lira – to make their marks in business and investing. Wealth management professionals may get a chance to prove themselves in the coming years.
 

 
Gonca Gürsoy Arunkar, CEO of UBS Turkey, says: "From liquidity concerns to an increased interest in governance structures, these findings reinforce what we’re seeing in the market, underpinning our strategy to support our Turkish clients. As a prominent wealth manager with a key focus on private business owners, UBS is pleased to support this study in an effort to deepen our understanding of client needs, which will help to enhance and adapt our client offering.”

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