Financial Advisors
Financial Advisors (Category 4) in DIFC & ADGM
DIFC and ADGM are the UAE’s hubs for fund managers, asset managers, and financial advisors. A Category 4 Licence allows firms to advise on financial products and arrange deals in investments without managing assets directly.
-
Why : Offer investment advice, arrange investment products, and serve professional investors.
-
Benefits : Lower capital requirements than fund managers, access to regional and global clients, internationally recognised framework.
-
Ideal for : Financial advisory firms, corporate finance advisors, wealth managers, and consultants.
Capital Requirements:
-
DIFC : Base Capital of US $30,000
-
Except : If an Authorised Firm is authorised to Operate a Crowdfunding Platform, Provide Money Transmission its Base Capital Requirement is $140,000.
-
-
ADGM : Base Capital of US $50,000
-
Except: Where the Authorised Person has a Financial Services Permission to carry out the Regulated Activity of Operating a Private Financing Platform, in which case the Base Capital Requirement is US $150,000.
-
Mandatory Functions
-
Senior Executive Officer (UAE resident).
-
Compliance Officer / MLRO (dual-hat allowed).
-
Finance Officer, Risk Officer, Independent Director (outsourcing allowed).
-
Internal & External Audit (mandatory, DFSA/FSRA approved).
Scope of Activities of Category 4 License
-
Arranging deals in investments.
-
Advising on financial products.
-
Arranging custody services.
-
Insurance intermediation and insurance management.
-
Arranging credit and advising on credit.
-
Providing fund administration.
-
Operating alternative trading systems or crowdfunding platforms (subject to additional approvals).
-
Providing trust services (other than express trusts).
-
Arranging or advising on money services.
FAQs
Category 4 firms cannot manage client assets or funds directly, that activity falls under Category 3C.
Typically, 6 - 8 months, depending on business plan, governance arrangements, and regulatory approvals.
Category 4 vs Category 3C - Key Differences
| Feature | Category 4 (Financial Advisor) | Category 3C (Fund & Asset Manager) |
| Capital Requirement | DIFC: USD 30k / ADGM: USD 50K | DIFC: USD 140k / ADGM: USD 250k |
| Core Activities | Advise, arrange deals, fund admin, credit, custody, insurance intermediation | Manage collective investment funds and client portfolios |
| Client Assets | Cannot manage or hold assets | Can manage, hold and advise on client assets |
| Investor Base | Professional clients, HNWIs, corporates | Professional investors, funds, institutions |
| Complexity | Lower compliance burden, fewer prudential requirements | Higher prudential standards, more stringent oversight |
| Setup Timeline | 4 - 6 months | 7 - 10 months |
Key Takeaway:
-
A Category 4 Licence is suitable if your firm’s focus is advisory and arranging services without discretionary portfolio management. Banks onboard as Introducers without LPOA.
-
A Category 3C Licence is required if you plan to manage client assets, portfolios, or launch funds. Banks onboard as asset managers allowing LPOA.
Zubin Muriya is a seasoned Governance, Risk, and Compliance (GRC) professional with over two decades of cross-jurisdictional experience in banking regulatory compliance, financial crime risk management, corporate governance framework, and audit advisory. His work across India and the GCC (UAE, Qatar, Bahrain) reflects a career rooted in regulatory rigor and operational integrity.
