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A life cycle approach to Islamic wealth management and risk tolerance

This paper examines a holistic, life cycle approach to Islamic wealth planning and management in relation to risk tolerance. In determining asset allocation, Islamic wealth planning must consider more than the risk-return trade-off of financial assets and take into account life cycle financial advi...

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Main Author: Abdullah, Adam
Format: Article
Language:English
Published: IIUM Press 2018
Subjects:
HG179 Personal finance
HG3368 Islamic Banking and Finance
Online Access:http://irep.iium.edu.my/67295/7/67295-life%20cycle%20approach%20to%20Islamic%20wealth%20management%20and.pdf
http://irep.iium.edu.my/67295/
http://journals.iium.edu.my/iiibf-journal/index.php/jif/index
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spelling my.iium.irep.672952018-11-02T05:53:34Z http://irep.iium.edu.my/67295/ A life cycle approach to Islamic wealth management and risk tolerance Abdullah, Adam HG179 Personal finance HG3368 Islamic Banking and Finance This paper examines a holistic, life cycle approach to Islamic wealth planning and management in relation to risk tolerance. In determining asset allocation, Islamic wealth planning must consider more than the risk-return trade-off of financial assets and take into account life cycle financial advice. This paper adapts a life balance sheet accounting approach that reflects both explicit and implicit Shari’ah compliant items in determining core capital, non-discretionary and discretionary wealth. The significance is that a Muslim wealth manager can objectively determine risk tolerance from implied leverage within the discretionary wealth framework of life cycle financial advice that better reflects the private client’s emotional goals and provides more flexibility in asset allocation. This contrasts with traditional net worth analysis of product-orientated personal financial planning that includes a subjective risk tolerance function derived from a questionnaire in determining asset allocation. This paper proposes a more holistic, sophisticated, goal-orientated approach, thereby enhancing the delivery of Shari’ah compliant Islamic wealth management services. IIUM Press 2018-11-01 Article PeerReviewed application/pdf en http://irep.iium.edu.my/67295/7/67295-life%20cycle%20approach%20to%20Islamic%20wealth%20management%20and.pdf Abdullah, Adam (2018) A life cycle approach to Islamic wealth management and risk tolerance. Journal of Islamic Finance, 7 (2). pp. 1-13. ISSN 2289-2117 http://journals.iium.edu.my/iiibf-journal/index.php/jif/index
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HG179 Personal finance
HG3368 Islamic Banking and Finance
spellingShingle HG179 Personal finance
HG3368 Islamic Banking and Finance
Abdullah, Adam
A life cycle approach to Islamic wealth management and risk tolerance
description This paper examines a holistic, life cycle approach to Islamic wealth planning and management in relation to risk tolerance. In determining asset allocation, Islamic wealth planning must consider more than the risk-return trade-off of financial assets and take into account life cycle financial advice. This paper adapts a life balance sheet accounting approach that reflects both explicit and implicit Shari’ah compliant items in determining core capital, non-discretionary and discretionary wealth. The significance is that a Muslim wealth manager can objectively determine risk tolerance from implied leverage within the discretionary wealth framework of life cycle financial advice that better reflects the private client’s emotional goals and provides more flexibility in asset allocation. This contrasts with traditional net worth analysis of product-orientated personal financial planning that includes a subjective risk tolerance function derived from a questionnaire in determining asset allocation. This paper proposes a more holistic, sophisticated, goal-orientated approach, thereby enhancing the delivery of Shari’ah compliant Islamic wealth management services.
format Article
author Abdullah, Adam
author_facet Abdullah, Adam
author_sort Abdullah, Adam
title A life cycle approach to Islamic wealth management and risk tolerance
title_short A life cycle approach to Islamic wealth management and risk tolerance
title_full A life cycle approach to Islamic wealth management and risk tolerance
title_fullStr A life cycle approach to Islamic wealth management and risk tolerance
title_full_unstemmed A life cycle approach to Islamic wealth management and risk tolerance
title_sort life cycle approach to islamic wealth management and risk tolerance
publisher IIUM Press
publishDate 2018
url http://irep.iium.edu.my/67295/7/67295-life%20cycle%20approach%20to%20Islamic%20wealth%20management%20and.pdf
http://irep.iium.edu.my/67295/
http://journals.iium.edu.my/iiibf-journal/index.php/jif/index
_version_ 1643618179649372160
score 13.211869

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