Islamic Wealth Management And World View Finance Essay - Free Essay Example

Prosperity and fortune is a significant goal for many individuals. It is the focus of trade and other business communications, such as sales. This fortune can come in many forms; it can be in the form of money to some people and to others it can be in the form of property i.e. houses, cars and lands. In order for man to obtain this prosperity and fortune, better known as wealth, man has to work (hard) for it, it does not come naturally. Even so, many people are lucky enough to have inherited this fortune of wealth. ÂÂ   Wealth management from an Islamic viewpoint follows appropriate guidance principle of shariah, which to a great extent, takes a different route from the typical point of view. Throughout the paper, it was deliberately intended to show that a difference exists. Any shortcomings on that purposes is owing to the technical know how on the part of authors. However, the paper sought to convey that owning wealth in Islam does not make any person the total owner of that wealth they have. Wealth is simply handed over upon us by God and thus, it has to be used and utilised in accordance with Gods consent as stated in shariah rulings. Wholesome ownership can be attained of this fortune in many ways, as in a sale contract or gift; making someone the successor of another as in inheritance, and the acquiring of a thing which free for the public use. In all of these situations, Islam has a way in managing this wealth. ÂÂ  Man as the vicegerent on this world is expected to seek this wealth and use it in a way that will help him obtain the happiness and contentment of God in this world and hereafter. With that, the paper provided some practical scenarios as to how fortune and riches can be used in Islam for this reason. It was therefore illustrated in zakat planning, al Ijarah financing and Islamic unit trust. The main purpose is to show the approach to wealth management in Islam not prevalent in the conventional way. The methods of financing should not only avoid riba, gharar and maysir but also be economically competent. In search of this economic competency, Islamic Banks now contribute to provide their services to Islamic banking; it varies from simple Shariah-compliant retail products to highly complex structured finance and large-scale project lending. Muslims (and non-Muslims) can now get hold of Islamic credit cards, can insure themselves and their property Islamically, can invest on line in Islamic funds, can track their investments Islamically and can even get a Shariah-compliant mortgage from many US based firm. Islamic banks are now located in places to other firms not only in large scale corporate financing but also more complex wholesale transactions such as syndications and securitization. Bahrains recent $255mn al-Hidd power financing is a case in point. Lead arranged by BNP Paribas, HSBC Amanah, Bank of Bahrain and Kuwait and Bank of Tokyo Mitsubishi, the $55mn Islamic tranche arr anged by the Saudi-based Islamic Development Bank and Kuwait Finance House was summoned as a landmark in district power finance. KFH had previously helped set an inter-creditor agreement precedent when it secured in 1995 a $200mn Islamic tranche for Kuwaits $1.2bn Equate petrochemical project. This convergence shows how the Islamic financial sector is part of the globalizing trend and not rejectionist. In essence, Islamic finance presents sets of well-understood tools within the framework of modern banking and finance. ÂÂ   Worldwide, the Islamic banking is forever growing. Islamic banking is managed by the shariah laws and aim to achieve equality and balance between the parties in an agreement. This makes it very different from typical banking as typical banking does not have the aspect of faith or religion in the governance. In terms of products and services, both types of banks offer similar services and products. This provides customers with a wide range of alternatives in deciding on a bank that best suits their needs and economic benefits. Researchers have established numerous factors of consumers preferences of bank selection, for example, the cost and benefit (Metawa Almossawi (1998), Abbas, Hamid et al (2003)), service quality (Ahmad Haron (2002), Asyraf Nurdianawati (2007), staff factors (Laroche et al (1986), Azura et al (2006)) and mass media advertising (Haron, Ahmad et al (1994), Othman Owen (2002)). ÂÂ   This research is motivated by the fact of choices the consumers have in their hands. Although many researchers have been conducted to find out the liking of consumers in selecting banks, this research tries to reveal the features persuading between Islamic banking and conventional (traditional) by using factoring analysis and logistic regression. From 191 respondents from the states in Malaysia, the result shows that advertising their services and products and ease of access are certainly important to the Islamic banking selection, whereby the service quality is not very important to the Islamic banking selection. There is an increasing trend, especially amongst the younger generation to reject unethical or socially irresponsible investment funds and businesses. Islamic Finance does not agree to undertake or fund and support the anti-social and unethical businesses such as gambling, prostitution, alcoholic liquor, nightclubs and narcotics. Islamic banks are forbidden from opening accounts or providing finance to persons and establishments involved in such activities. In this admiration, it is clearly ahead of the recent rush in ethical finance and socially responsible finance that are becoming quite popular in the Western world. Due to their active participation and familiarity of the nature of businesses of their clients, Islamic financial institutions are in a better position to detect and avoid the channeling of depositors money for financing extremely risky but equally remunerative anti-social behavior. The Islamic finance service industry is growing very fast and is attracting the interest of both Muslim and non-Muslim market players. Experiences and knowledge so far suggests that there are a number of ways in which the industry is adding value to the global financial system. The challenges facing the sustainability and expansion of the industry in the future are quite alarming. An early and reasonable solution to meet these challenges will decide the prospect of the industry