Financial firms gear up to serve wealthy Muslims

Muslims consider interest on sums borrowed or loaned as haram - money for nothing, without entailing any risk - which has to be avoided. Returns have to be structured under different rules, perhaps linked to commodities or rental or lease payments, rather than interest.

For example, Islamic mortgages are based on rental payments rather than interest payments.

There is also an ethical element to consider. Muslims must not invest in companies they believe are harmful to society or make profits from immoral means. Companies involved in alcohol, tobacco, defence and pornography are strictly prohibited.

There is a large Asian wealth market in Scotland worth at least 300 million. And estimates put the Shariah-compliant market at about 150m.

Despite the country having such a thriving Muslim community, access to relevant financial products and advice has been limited. This is now starting to change.

Barclays Wealth in Scotland is one of the companies helping to lead the way in the UK.

Saftar Sarwar, a manager in private banking at Barclays Wealth, said: "The plan is for us to have a full and complete Shariah platform offering a range of private banking solutions.These will include Shariah-compliant cash deposits, lending, equity solutions and Islamic bonds.

"Affluent clients can then access products without having to go to myriad banking providers. This is not really available elsewhere in the marketplace. Some companies offer segments of Islamic finance but no-one has done it in a joined-up manner. We hope to have the full Shariah-compliant platform up and running by early 2008.

"Due to our massive buying power we can also look to offer Islamic-compliant hedge funds, private equity funds, venture capital funds."

Although the platform has not yet been created, Barclays Wealth already offers the opportunity for investors to put their money directly in Shariah-compliant stocks and structured products, branded under the name Baraka, which means "blessing" in Arabic.

Investors can also access new Islamic bonds - known as sukuks - and property funds that are coming onto the market.

Scotland has a well-established Muslim community in Glasgow and Edinburgh and many Muslims are generating significant wealth and wanting to explore ways to manage their money professionally.

Ascension Wealth Management, with an office in Glasgow, offers a tax consultancy and investment service to Muslim clients.

Harris Bokhari, managing partner, said: "We find ways to mitigate tax liability that are Shariah-compliant. We also advise on low to high-risk investment opportunities. For example, at the lower risk end of the scale we talk to life insurance companies to identify property funds that have no gearing and don't invest in such properties as nightclubs and casinos."

With Scotland's population becoming increasingly cosmopolitan, financial services firms are realising they should tailor their services to meet the needs - often related to language - of different nationalities.

Lloyds TSB Scotland recently launched its Silver account for immigrants from Poland and other countries.

And Gillespie Macandrew, Edinburgh-based solicitors and investment managers, has a team of three in its Chinese language department offering a full range of legal and investment services. All three, led by Peter Ng, are fluent in Cantonese and Mandarin.

Ng said: "I must have more than 1,000 clients. I would say there are possibly tens of thousands Chinese people in the major cities in Scotland. I've been working with the Chinese community for about 30 years, so people know about my expertise."