YORKSHIRE’S Muslim community will soon find it easier to access financial services.
The accountants and business advisers Garbutt & Elliott has launched an independent financial planning arm for the Muslim community, called Ummah Financial Planning.
According to Garbutt & Elliott, the needs of Muslims in the UK have been neglected by the financial services industry for years.
Ummah Financial Planning will allow Muslims to manage their finances in line with their personal beliefs.
Simon Holt, the managing director of Ummah Financial Planning, said yesterday: “There are very few specialist intermediaries in this market. We want Ummah Financial Planning to go national, but initially the business will be based in Yorkshire. There are between two and three million Muslims in the UK, and around 25 to 30 per cent of them live in West Yorkshire.”
Mr Holt feared that many Muslims could be steered away from financial services because they didn’t believe there were any products suitable for them.
Once the products were available, there was a “huge lack of conduits” to get them to consumers, Mr Holt added. He said: “I worked alongside a Muslim scholar for nearly three years, supporting him in his work to bring more ethical financial products to Muslims in the UK and overseas. During this time, I realised that Muslims need specialist financial advice firms to be established which understand the culture, values and beliefs of the faith. This is where the idea for Ummah Financial Planning came from.”
Initially, Ummah will have four Leeds-based advisers, but Mr Holt hopes to add to this number very quickly.
Ummah has timed its launch to coincide with “this blessed month of Ramadan.”
Shabab Gulfraz, financial consultant with Ummah Financial Planning, said: “Throughout this month, Muslims from all countries unite in a period of fasting and spiritual reflection.
“All Muslims will spend time in this month reflecting on their individual faith and practices and reading from the Quran, with the aim of improving and strengthening themselves in accordance with the teachings of Islam.
“Ramadan is much more than just not eating and drinking. Muslims are called upon to use this month to re-evaluate their lives in light of Islamic guidance. Towards the end of this blessed month of Ramadan, Muslims are required to pay a fixed portion of their wealth to charity. When calculating the amount to pay, Muslims will take a detailed look at their financial arrangements.
“When looking at their financial arrangements, Muslims need also to consider how their money is invested and what drives the returns they are receiving. Many of the traditional UK financial products involve receipt or payment of interest and as such are considered Haram (unlawful) for Muslims.
“Many ISA, PEP, unit trusts and pension funds invest money in a mix of different assets including equities (shares), property, gilts (loans to the Government), corporate bonds (loans to companies) and cash (gilts, corporate bonds and cash are all interest bearing)”.
“Although these funds are professionally managed by teams of investment managers whose aim is to maximise the returns and create profit; they are often Haram (unlawful) for Muslims as they generate some of their profits from interest or investment into un-Islamic activities.”
Haram activities could include alcohol production, gambling, and pornography.
Mr Gulfraz said: “The Ummah team have spent time consulting with the community to seek their advice on how best to engage with Muslims and brought in a specialist Muslim consultant to lead this work for them.”
The Ummah Financial Planning initiative follows comments from a leading Yorkshire academic, who argued that Islamic finance could offer more stability for investors than conventional banking.
Professor Ros Haniffa, who is the director of the centre for accounting and accountability at Hull University Business School, believes Yorkshire should be taking a lead in the growing market for Shariah-compliant financial services.
Ms Haniffa also claimed that the rise of Shariah-compliant banking would provide more work for solicitors and business advisers.