Islamic wealth management means organising all of a person's or family's assets, including investments, property, a business and cash, in a Sharia-compliant way, taking into account zakat, Islamic succession rules and the constraints of the law of the country of residence.
Taking stock before choosing investments
The adviser first lists what already exists: current accounts, conventional life insurance, an interest-bearing mortgage, business shares. This review often reveals non-compliant legacy holdings that should be dealt with gradually rather than sold abruptly at a tax loss.
Moving existing wealth out of interest-bearing products
An interest-paying savings contract can be surrendered and reinvested in a compliant fund; interest already received is generally given to charity without expecting reward. The timing takes account of exit penalties and local taxation.
What to do about an existing mortgage
Repaying an interest-bearing loan early or refinancing it through Ijara or diminishing Musharaka is among the priorities often recommended. Feasibility depends on the Islamic banking offer in the country, which is still absent or limited in several European states.
Employee savings and pension schemes
Workplace schemes rarely offer a compliant option. When the employer provides an Islamic fund, the employee can direct contributions there; otherwise some Sharia boards allow keeping the benefit while purifying the portion linked to interest.
Spreading assets across the main halal asset classes
A compliant allocation typically combines screened equities for growth, Sukuk for income, rental property for stability, physical gold for diversification, and a cash pocket held in a non-interest current account or an Islamic money-market fund.
A cautious profile without conventional government bonds
Without interest-bearing bonds, the defensive pocket relies on sovereign or corporate Sukuk and Islamic money-market funds. The choice of euro-denominated Sukuk remains narrow, which often exposes European investors to US dollar currency risk.
Property held directly or through a fund
Direct rental property works if it is bought without an interest-bearing loan and let to lawful businesses. An Islamic property fund pools this risk, but charges its own fees and sometimes limits liquidity to set redemption windows.
Rebalancing without leaving the compliant universe
Once a year, the adviser sells asset classes that have exceeded their target weight and tops up the others. At the same time he checks that each holding is still compliant, since a company may leave an Islamic index between reviews.
Building zakat into the annual review
Each year the manager prepares the zakat base: cash, gold, trading stock and the zakatable share of equities held. For a share portfolio, several methods coexist, depending on whether the investor holds for the long term or trades actively.
Passing on wealth according to Islamic inheritance shares
The rules of fara'id set the shares of legal heirs, and a will, or wasiyya, may cover only one third of the estate, in favour of non-heirs. In a European country, these wishes must be drafted in forms recognised by local civil law.
Hibah and family Waqf: two tools for early transfer
Hibah is a lifetime gift, effective once possession passes, which lets a parent help a child during their lifetime. A family Waqf ties up an asset whose income benefits descendants; its legal recognition varies widely between countries.
Choosing an adviser and checking Sharia oversight
An Islamic private bank has a Sharia committee and a compliance audit. An independent adviser should be able to show the certificates of the funds offered, explain how he is paid and state whether he receives commissions from fund managers.
Specialist external source
The IFSB publishes prudential standards and governance principles, notably for Islamic collective investment schemes, which frame the institutions to which wealth is entrusted.