Almost nobody asks. It feels rude, it feels like accusing someone of something, and the meeting is usually pleasant and the person across the table is usually likeable. So the question goes unasked and the answer goes unheard, and it is the single most useful piece of information in the entire conversation.
How your adviser is paid determines what they can afford to recommend. Not because advisers are dishonest — most are not — but because a payment structure quietly shapes which products stay commercially viable to sell. Understanding the three models takes about ten minutes and changes how every subsequent meeting reads.
Three ways advice gets paid for
| Model | Who pays | What it suits | Where the tension sits |
|---|---|---|---|
| Commission | The product provider, from charges inside the product | People who would not pay a fee upfront and would otherwise get no advice at all | Products that pay nothing — index funds, a savings account, "do nothing for now" — cannot fund the advice |
| Fee-only | You, by the hour or a fixed project fee | A defined question: portfolio review, exit planning, a second opinion on something you were sold | You feel every dirham, so it is easy to skip advice you would benefit from |
| Percentage of assets | You, as an annual percentage of the portfolio | Ongoing management where you want someone else at the wheel | The fee grows with the portfolio whether or not the work does; and advice to spend money elsewhere reduces the fee base |
None of these is corrupt and none is clean. Each embeds a tension, and knowing which tension you have bought is more useful than believing you have avoided all of them.
What commission actually looks like here
The commission model deserves the most explanation because it is the least visible and, historically, the one that has done the most damage in this market.
On a long-term insurance-linked savings plan, the adviser has traditionally been paid a large sum at the outset — a payment linked to the total amount you committed to over the entire term rather than to what you had actually paid in. Arrangements of that kind are usually described as indemnity commission. The charging structure inside the policy then recovers that payment over the following years, which is why the surrender value in the early years sits below the sum of premiums paid.
The UAE tightened this materially. Insurance Authority Board of Directors' Decision No. 49 of 2019 came into force on 16 October 2020, delayed six months from an original April date, and now sits in the Central Bank's rulebook:
| Provision | What it sets |
|---|---|
| Article 4 | First-year commission on a regular-premium policy capped at 50% of the annualised premium, or 50% of total commissions payable, whichever is lower. The balance must be paid in equal instalments over the remaining premium term, and first-year commission is subject to clawback for at least five years. |
| Article 3 | On the savings element, commission capped at 4.5% of the annualised premium multiplied by the term in years, with an overall ceiling of 90% of the annualised premium across the whole contract. |
| Article 9 | A free-look period of at least 30 calendar days. |
| Article 10 | Illustrations must show protection benefit, cash value, net asset value, maturity benefit and surrender value separately and net of all charges, on at least two clearly stated scenarios. |
These caps applied going forward. They were not applied retrospectively. A policy issued before 16 October 2020 was written under the previous regime and none of the above constrains it. Anyone holding a long-term plan should establish which side of that date it falls on before comparing notes with anyone else — our guide to continuing, making paid-up or surrendering an offshore savings plan works through what to do next.
Who is allowed to advise you
The UAE's regulatory map has more than one authority on it, and which one applies depends on where the firm is licensed rather than where you happen to live.
| Regulator | Covers | Relevant permission |
|---|---|---|
| Capital Market Authority (CMA) formerly the Securities and Commodities Authority (SCA) | UAE onshore | Financial consultancy licence |
| DFSA | DIFC | Category 4 licence with the relevant Financial Services Permission |
| FSRA | ADGM | Financial Services Permission |
| Central Bank of the UAE | Insurance products onshore | Insurance broker or agent licence |
Separately from the CMA rename, Federal Decree-Law No. 6 of 2025 replaced the previous Central Bank law and the 2023 insurance law, consolidating banking and insurance regulation under a single framework and extending the Central Bank's scope. Institutions were given a one-year transition, with a compliance deadline of 16 September 2026. For a consumer the practical effect is at the edges rather than the centre — stronger fraud-prevention and breach-notification obligations on institutions, a new grievances and appeals route against Central Bank decisions, and materially higher maximum penalties. The regulatory map below is unchanged by it.
Two points follow. First, the onshore regulator was renamed with effect from 1 January 2026 — the Securities and Commodities Authority became the Capital Market Authority under Federal Decree-Law No. 32 of 2025, with Federal Decree-Law No. 33 of 2025 covering capital markets organisation and regulation. It was more than a rebrand: scope was extended to virtual assets, the law now reaches persons targeting UAE clients from outside the country, and penalties for unlicensed financial activity run to substantial fines and imprisonment. Older material referring to the SCA is describing the same body under its previous name.
Second, and more useful day to day: giving investment advice without a licence is prohibited. A firm's permission is a matter of public record, and checking it takes a couple of minutes on the relevant regulator's register. It is the cheapest due diligence available and almost nobody performs it.
An adviser may hold one permission and be discussing a product regulated by another authority entirely — for example an insurance-linked savings plan issued from an offshore jurisdiction, sold by a firm licensed in a UAE free zone. That is not necessarily improper, but it does mean the protections you have are not automatically the ones you assumed. Ask which entity you are contracting with, where it is licensed, and which regulator would handle a complaint.
Five questions, asked in writing
- How are you paid on this recommendation, and how much? Not "are you paid commission" — the amount, in dirhams or as a percentage.
- What would you be paid if I did nothing, or put the money in an index fund instead? The answer to this reveals more than the answer to the first.
- Which entity am I contracting with, where is it licensed, and what is the licence number? Then check the register yourself.
- What are the total charges over the full term, in dirhams, on the illustration's own assumptions? A percentage is easy to present favourably. A cumulative figure is not.
- What are the exit terms in years one, three and five? A charge that steps down over several years tells you the product was designed around you staying.
All five in writing, taken away, read at home. A recommendation that survives being read away from the person who made it is a recommendation worth considering. Pressure to decide in the meeting is itself an answer.
The third option, which is doing it yourself
Self-directed investing has no adviser cost at all, and for a straightforward situation — a salary, a savings target, a long horizon, no complicated cross-border position — a low-cost global fund bought through a regulated broker covers most of what advice would have arrived at.
The honest counterweight is that advice is not only about fund selection. It is about not selling in a crash, not stopping contributions when something feels uncertain, and having a plan that survives a bad year. Those failures cost more than any fee, and they are behavioural rather than technical.
The middle route that suits a lot of people: run the portfolio yourself, and buy a few hours of fee-only advice at genuine decision points — a large lump sum, an exit from the region, a complicated legacy product. You pay for expertise where it earns its keep rather than as an annual percentage forever. Our beginner's guide to investing in the UAE and the ETF investing guide for UAE expats cover the self-directed route.
I have never sat down with a financial adviser in the UAE. One informal conversation about which ETFs to buy, and that was the extent of it — everything else has been self-directed, starting with a robo-advisor and moving to a self-directed broker as the amounts grew.
That is not a recommendation, and it comes with an obvious limitation: my situation is straightforward. One earning country, no pension scheme to unwind, no legacy product to disentangle, no cross-border tax question that needed resolving. Someone with a UK pension, a property back home, a spouse of a different nationality and children in three time zones has a genuinely complicated problem, and "do it yourself" is not a serious answer to it. What I would say is that the cost of advice should be visible to you, in dirhams, before you agree to anything — and that has been true of every good adviser I have heard about and none of the bad ones.
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The commission model gets criticised heavily, and much of that criticism is deserved for what was sold in this region before 2020. But the argument is often made carelessly, and it is worth stating the counterpoint: a person who would never write a cheque for advice, and who therefore never receives any, is not obviously likely fine than a person who bought an imperfect product and at least started saving. Commission exists because most people will not pay directly for advice. Removing it does not create demand for fee-only advice; it mostly removes the advice.
What has genuinely improved is disclosure. The 2020 rules force illustrations that separate the numbers, cap what can be taken upfront, and require the effective position to be shown. That is a real change and it means a policy sold today is a different proposition from one sold in 2016 — which is precisely why anyone holding an older contract needs to know which regime theirs was written under.
The practical position we would defend: there is no payment model that removes conflict, only models that place it in different places. Choose the tension you understand, and insist on knowing its size in dirhams. An adviser who answers that question straightforwardly has told you most of what you need to know about them. So has one who does not.
The Broker Match Quiz narrows the field by regulation, running cost and how hands-on you want to be — two minutes.
Common questions
Yes. Onshore advice falls under the Capital Market Authority — formerly the Securities and Commodities Authority, renamed with effect from 1 January 2026 — while DIFC firms are regulated by the DFSA and ADGM firms by the FSRA. Insurance products onshore fall under the Central Bank. Advising without a licence is prohibited.
Ask for the licensed entity's name and licence number, then check the relevant regulator's public register. Confirm the entity you are contracting with is the one that holds the permission, since a group may include several companies in different jurisdictions.
For policies issued from 16 October 2020, first-year commission is capped at 50% of the annualised premium or 50% of total commissions payable, whichever is lower, with the balance spread over the remaining term and clawback applying for at least five years. Policies issued before that date are not subject to these caps.
It exists but is less common than commission-based advice, largely because demand for it is limited. Some firms offer hourly or project-based work alongside other models — ask specifically, and ask what the fee covers.
It depends on how complicated your situation is rather than on how much money you have. A single earning country, a long horizon and no legacy products is a situation most people can handle themselves with a low-cost fund. Multiple jurisdictions, a pension to unwind, or an existing product you do not understand are the cases where paid expertise tends to earn its cost.
Next steps
- For any adviser you already deal with, establish which entity you contracted with and which regulator licenses it.
- Ask, in writing, how they are paid on each product you hold and how much.
- For any long-term policy, establish whether it was issued before or after 16 October 2020.
- Work out the total charges in dirhams over the full term, not as a percentage.
- Decide which parts of your situation genuinely need advice and which you can run yourself.
Further reading on ExpatWealthPlus
- What is DFSA regulation?
- Best investment platforms for GCC expats
- DIFC wills and inheritance planning for UAE expats
Official sources
Every figure in this article is checked against the primary source. These are the places to verify the current position for yourself, since rates, rules and product terms change.
- DFSA public register →Check whether a DIFC firm holds the permission it claims
- ADGM FSRA public register →Check an ADGM-licensed firm
- CBUAE Rulebook — Decision No. 49 of 2019 →Commission caps, free-look period and illustration requirements