Living in Dubai affords a tax-free lifestyle in one of the most innovative, cosmopolitan and career-driven cities in the world. Yet, many us — whether citizens or expats — can do a better job maximizing the wealth-building opportunities this amazing city offers with the guidance of a digital financial advisor in Dubai.
However, in the absence of financial expertise, we tend to fall prey to the luxury trap that often accompanies earning a high(er) UAE salary. We can definitely do better to avoid one day potentially looking back on our careers here and suddenly realizing that we don’t have much to show for it.
Suddenly, we realize that all of our savings have been spent on socializing, shopping and other temptations offered by high-cost Dubai. We lived well! But this could have been achieved with better budgeting and proper planning for building a better future.
These missteps in personal finance are perhaps so common because access to information has not been easy and, traditionally, working with a financial advisor in Dubai has not been simple. The industry has long been defined by:
- A lack of transparency and liquidity with investment holdings
- High minimum investments (starting at $5,000, and over)
- Complex industry jargon that makes the investment experience “scary”
Today, there is another option. Working with a digital financial advisor in Dubai can solve the challenges created by the traditional financial advisory industry.
New financial technology is transforming so much of our world, from how we pay to how we save, and the personal investment industry is no different.
By embracing the power of investment automation, financial advisory algorithms and online platforms, a digital financial advisor in Dubai is now able to offer an easier, lower-cost and more accessible investing experience:
- You can easily access and view your investments on your own dashboard
- You can automate the upkeep of your investment portfolio
- You can select your investment profile based on a smart algorithm’s suggestions
- You can start with a much lower minimum investment (just $500, in our case)
- You pay low-cost fees that greatly beat traditional financial advisory charges
- You can access and easily understand your investments, any time, any where, because the service is digital and usually comes with a lot of content.
Over the past few years, advancements made in financial technology have clearly improved the potential for how we can benefit from a financial advisor in Dubai. This is why we developed a fintech platform with the mission to make wealth management easier for everyone.
We launched it in 2017, and called in Sarwa.
Sarwa (Arabic for “wealth”) is a hybrid robo advisor platform that offers a technology-first approach to financial advisory with the aim of better enabling long-term investment goals — what we like to call the “future you.”
When we built Sarwa, we ensured to offer the following experiences:
- Hassle-free, online financial advisory: A fully online application process, with no paperwork and no need for a face-to-face meeting. The use of an online questionnaire helps our algorithm assess your risk profile and recommend an investment portfolio that fits your goals. We then further customize this profile with the help of human financial planning expertise.
- Automated investments: Since Sarwa is a digital platform, your investments are automated and rebalanced once we receive an approval from your end. This allows you to just sit back and relax while the digital platform does the heavy lifting.
- Unintimidating approach to the stock market: Low-fees and low minimums to start an account have been crucial ingredients to Sarwa’s success. This allowed us to offer democratic access to personal investing, which we provide through a passive investment approach that builds portfolios with a heavy emphasis on exchange-traded funds (ETFs).
Below we briefly outline each of these experiences, which we believe represent the best practices that a digital financial advisor in Dubai should offer, as a minimum.
How a digital financial advisor in Dubai simplifies long-term investment planning
Previously, it used to be common for only highly wealthy individuals to hire a financial advisor in Dubai. And even then, service was not perfect.
- Consultancy costs are high
- Investment holdings are vague, and never truly transparent
- In-person or over-the-phone meetings are inconvenient
- Investment industry language is not meant to be widely understandable
One of Sarwa’s main goals was to offer a hassle-free and transparent financial advisory option, thereby solving the above shortcomings of traditional financial planners.
As a hybrid robo advisor, Sarwa builds customized investment profiles and portfolios for our investors using financial technology, but supports this service with real human financial experts that you can easily contact and speak to — not chatbots.
New applicants first fill out a free form online (note: no consultancy meeting fees here) and then our financial algorithm assesses your appetite for risk, using your age, financial knowledge, goals, and other credentials.
This info ultimately goes into creating the optimal investment portfolio to fit your needs over the long run. An accredited financial planner then offers further guidance.
If more detailed help is needed anywhere in the process, the investor can always schedule a call with a wealth advisor who can help assist you.
Built-in automation for investment accounts
Individual stock market investors — aka DIY investors — have to constantly rebalance their portfolios, reinvest dividends and adjust their assets accordingly. This is a time-consuming operation, one that most novice investors get wrong.
Alternatively, paying for a brokerage or traditional financial advisor in Dubai can be very expensive.
The advent of financial technology, however, allows for the automation of these important investment bookkeeping practices.
Sarwa’s online platform performs automatic rebalancing and optimal reinvestment of dividends using a smart technology.
Ultimately, this enables the investor to sit back and let their investments work for them, all at a fraction of what it used to cost for wealth management services just a few years ago.
In other words, Sarwa takes care of your entire investment plan for you once you have funded your account, leaving smart financial technology to handle the technical portfolio management.
Making investing low-cost, unintimidating and accessible
Traditionally, a financial advisor in Dubai offers expensive, exclusive consultancy services, acting as wealth managers that are made for only high-net-worth individuals.
But a digital financial advisor in Dubai makes investment much more approachable.
First off, as an online and technology-first service, Sarwa is practical, offering an easy way to open an account without the need for face-to-face meetings.
Secondly, our online platform enables investors to have liquidity — there are no lock-in periods and there is an easy process to gain quick access to your money.
Importantly, Sarwa’s entire investment philosophy is founded on the mission to better educate investors.
Your Sarwa wealth advisor will thus introduce you to the difference between active and passive investment and provide evidence for why our platform is built to follow a passive approach (which Warren Buffett, amongst others, also follows).
Vanguard, one of the top investment banks, has called ETFs a “democratic” investment asset, and we couldn’t agree more.
Using ETFs and the passive investment approach enables us to explain investing in an easy-to-understand strategy that is proven to benefit investors looking for reliable long-term returns.
Final thoughts on working with a digital financial advisor in Dubai
If we have learned anything since launching in 2017, it is that the power of thinking over the long term and passive investing can best help control emotions when investing, what famed index fund investor Don Hays has called “your worst enemy in the stock market.”