Speaking to ifa, Seasay said Islamic investors could potentially be a considerable market for financial service providers.
“The population of Muslims in Australia is about half a million, so the market is there but the products are not there,” he said. “There is currently only one Sharia-compliant superannuation fund and apart from that there is nothing,” he added, referring to the Islamic superannuation option launched by Crescent Wealth in late 2012.
Almost every type of investment offered in the mainstream market can be re-packaged and targeted to Muslim investors by highlighting compliance with principles of Islamic finance set out under Sharia law, including the prohibition of interest-based transactions and “ensuring a nexus between cash and assets,” said Seasay.
In particular, Seasay – who worked for an Islamic bank in Malaysia before migrating to Australia and qualifying as a financial planner in the early 2000s – sees potential demand for a Sharia-compliant managed fund, property securities fund and Islamic debt obligation and insurance products.
In addition to its corporate and investment advisory boards, Crescent Wealth maintains a separate supervisory board made up of religious scholars and experts who advise on appropriate investments, providing a potential model for financial planners to emulate.
Old Planner and Osama. If you think it is such a great opportunity, I’d like to see you put your money where your mouth is and set up all of the requisite structures. Fund managers, IF they think it is worthwhile will invest in the structures to make it happen.
It is opinions like David’s that makes this an area of opportunity. Every Australian should have the chance to to create a better financial future – regardless of creed or colour. Planners who successfully cater for the Muslim market will also find that they get significant referrals as word spreads quickly…
Looks like we got ourselves a right wing bigot in the form of ‘David’ who is spreading lies as a matter of fact. The need for sharia is not so that the west conforms but for Muslims to be able to practice finance in the most ethical manner according to their belief system.
The estimated super of the Muslim community alone is approx $1 Billion. If that is not a market worth tapping into then you simply also need to look towards the south-east Asian nations and their populations of Muslims to see the the bigger potential of Australia being at the forefront of Sharia finance and investments.
Wealth amongst the Muslim community is not as great as some would suggest. It doesn’t make economic sense, nor is it profitable for investment managers to create sharia compliant structures. The push for sharia compliant products is not one that is driven out of necessity but one of Islamic political ideology for the West to conform. It also opens up a legal risk for financial planners if they put a muslim client into a non-sharia compliant investment that produces negative returns. They could be liable should a client take them to the financial ombudsman. Not worth the litigation risk, further onerous regulation for something that is ideologically driven.
I agree with this completely however it’s a tough client base to tap into unless you are already part of the community or have some good referral networks. You also need to have a good appreciation of finance principles considering sharia law. It can be learned, but you’ll need to invest some time in it.