According to Boston Consulting Group, the UAE, for example, was projected to be home to almost $1 trillion of cross-border wealth by 2029 from $700 billion in 2024. A question that arises is how the geopolitical risks will shift the balance of power in where IFCs are located. For example, it is probable that this will play to the strengths of jurisdictions such as Switzerland. It is worth remembering that a number of UHNW individuals and those less affluent have moved from places such as the UK to Dubai – a point noted here in our recent features on "family offices in motion." 

The drama also reinforces a point that this news service wrote about here that geopolitical risk is now a central agenda item for wealth advisors to master, and this will need to be factored in when it comes to deciding where to locate staff, booking centers and operations, as well in the education of advisors.
 

Oil, gold and stocks

“From a financial market standpoint, all eyes will be focused on the oil markets given that Iran produces circa 3 per cent of the global output – the fourth largest producer in OPEC,” Hou Wey Fook, chief investment officer, DBS Bank, said. “The key swing factor will depend on whether Iran moves to shut the Strait of Hormuz, an important chokepoint where roughly one-fifth of the global crude oil and LNG passes through. A prolonged closure of Hormuz will cause huge disruption to the global oil trade given that even the spare oil capacity from Gulf producers has to pass through this strait. To make up for the shortfall, the US can in theory tap its Strategic Petroleum Reserve . But in the event of a full-fledged crisis, the strategic stocks in the US will also be insufficient to offset the damage.”

“Crude oil price could hit $100 to $150 a barrel in the extreme scenario of full blockage for the Strait of Hormuz. This will be problematic for risk assets on two fronts: 1) Surging oil prices arising from supply shock translate to higher inflation expectations, limiting the room for the Fed to cut rates; 2) Inflation surge to weigh on economic activities, increasing the likelihood of a global recession,” Hou Wey Fook said.

“The global economic impact of conflict in the Middle East will hinge on its effect on energy markets. If oil stays near $70 to $80 per barrel, developed market inflation will be only about 0.2 to 0.3 percentage points above our baseline forecast and the broader economic fallout should remain limited,” Neil Shearing, group chief economist, Capital Economics, a UK-based consultancy, said. “But if prices climb to $90 to $100, DM inflation could rise up to 0.7 percentage points and we would probably shave a few tenths from 2026 GDP growth forecasts. The US is far less exposed than Europe or Asia.”

"Investors should recognize that in the immediate aftermath of an event of this scale there will be a jarring set of headlines and we are seeing high, potentially peak, uncertainty,” Adam Hetts, global head of multi-asset and portfolio manager at Janus Henderson Investors, said in a note. “Rather than trying to market-time geopolitical realignment and the associated risk we believe in maintaining exposure to the long-term secular growth trends that will continue to shape markets globally."

The Franklin Templeton Institute said the initial market reaction to the conflict will typically see a fall in US Treasury yields – a safe-haven move – and a fall in stocks .
 
“Impacts on activity/earnings may be delayed and uneven. The US dollar reaction is not guaranteed; gold tends to benefit while bitcoin has been trading like a risk asset , reinforcing that it’s not typically a reliable hedge/diversifier in geopolitical drawdowns,” the organization said. 

“Markets often learn 'this is short-run’ : Historically, geopolitics often produce an initial jump in risk premia before investors conclude the aggregate earnings hit is modest. We would not yet label this a clean buy-the-dip setup – duration, shipping/insurance mechanics, and the endgame matter more than the first headline,” it said.