Contemporary Islamic Finance: Innovations, Applications and Best Practices

CHAPTER 8

Elements of Islamic Wealth Management

PAUL WOUTERS

Senior Foreign Lawyer AZMI & Associates—Advocates and Solicitors (Malaysia-Singapore) CEO PT Senturiyon Global (Indonesia)

The devout Muslim will be acquainted with the principles briefly explained here. This chapter therefore addresses some of the issues related to Islamic wealth management to a not yet introduced audience, in a language and point of view that they understand, without a priori assuming a conversion to Islam. It tackles some of the issues and explains differences from their conventional concepts and expectations.

RECOGNITION OF A DIFFERENT PARADIGM

Knowing that most readers will be novices to the concepts of Islamic wealth management, we briefly explore the Western eighteenth-century creed of the individual that created the present Western Weltanschauung, at least as far as money and finance are concerned: the survival of the fittest combined with the reassuring presence of the imaginary market equilibrium. “My bank account and my financial assets are my concern only. I can dispose of them as and when I desire. I can use them or not use them at will.”

Conventional wealth management is in essence gaining maximum (dollar-wise) short-term profitability on the individual bank account, assuming thereby the development of overall mid-term or even long-term prosperity of the community as an implicit result. How this happens remains unclear, but we have been taught that the community derives benefit from our ...