How to Set Up a Robo-Adviser or Digital-Wealth Platform in the UAE

ADGM's FSRA treats "digital investment management" as a defined category: investment management delivered through algorithm-based tools with limited or optional human interaction, run fully digitally or as a hybrid where a client can still reach a human adviser. A technology company that only licenses its engine to a wealth manager is not itself a Digital Investment Manager and needs no authorisation; the wealth manager using it does. Within that category, the FSRA looks for three Regulated Activities: Advising on Investments or Credit (recommending a buy, sell or rebalance), Managing Assets (exercising discretion to instruct a broker on the client's behalf), and Arranging Deals in Investments (passing an instruction only after the client has agreed to it). A firm authorised for Managing Assets does not need separate permission for the other two where it performs them incidentally to its discretionary role.

DIFC runs a parallel structure under the DFSA, covering wealth management, asset management and fund management as distinct categories, with the same question — advice or discretion — setting which applies. Onshore, the CMA now holds the federal mandate for investment advice and portfolio management that the SCA previously held, with DIFC and ADGM continuing to run their own regimes. None of these bodies licenses a brand name or an app; each licenses the function the product performs, so the same screen can sit under a different authorisation depending on what happens when the client taps "confirm". Where the technology and the licensed entity sit in separate companies — common once a model-portfolio business grows — a regulated and complex ownership structure needs its own planning, because the group has to answer for both halves consistently.

In DIFC, authorisation follows a fixed sequence: a Letter of Intent, then a Regulatory Business Plan submitted for the DFSA's in-principle approval, then registration with the Registrar of Companies once approval is granted. That plan is the document that has to show the DFSA the product, the client journey and the controls around it in one coherent file — the kind of work covered under business plans and documentation. ADGM's equivalent is its Digital Investment Manager guidance, issued because the FSRA found that algorithm-driven advice carries risks a conventional application does not surface: model error, limited human oversight of individual recommendations, and heavy reliance on an online questionnaire instead of a conversation. The guidance adds to the standard authorisation process rather than replacing it.

Because the algorithm does the work a human adviser would otherwise do, the FSRA expects the firm's board and senior management to have direct oversight of its design, performance and security, with named roles responsible for it and a documented continuity plan if that person leaves. The decision logic has to be explainable, traceable and repeatable — not a black box the firm cannot walk a regulator through — and the data behind it has to account for behavioural bias in how clients answer questions. Firms must test the model regularly, and the FSRA can require an independent audit of a complex one. The firm also needs the practical ability to stop or change the algorithm if something goes wrong, a documented process for catching and reporting errors, and a contingency plan so a model outage does not leave client interests unprotected. This sits alongside ordinary technology governance — secure data handling, transaction monitoring, system resilience — and standard financial-crime controls, since a platform that onboards clients through a form is an easier target for misuse than one that meets them in person.

A risk-profile questionnaire is not a formality; it is the mechanism the firm uses to meet its suitability duty, and the FSRA expects its depth to match the complexity of what is being recommended — a simple model portfolio needs less than a geared or alternative-asset one. The questionnaire has to be able to turn a prospective client away: a knock-out mechanism that rejects someone whose investment horizon or liquidity needs do not fit what the platform offers, and a route to a human adviser when a client's answers are inconsistent. Where a client picks a portfolio different from the one recommended, the platform has to explain, specifically, why the recommended portfolio was considered suitable for that client's circumstances. Client data has to be kept current, which in practice means prompting clients to refresh their answers periodically rather than relying on a profile built once at onboarding.

ADGM publishes exact figures for this. A Digital Investment Manager authorised to manage client assets with discretion sits in prudential category 3C, with a base capital requirement of USD 250,000, rising to the higher of that figure or an expenditure-based minimum — 18/52nds of annual audited expenditure if the firm holds client assets directly, 13/52nds if it does not. A firm that only advises, arranges deals, or arranges custody sits in category 4 instead, at a base capital requirement of USD 50,000. DIFC applies the same underlying logic through the DFSA's own category structure, with the capital figure set by the same question: advice or discretion. On custody, a Digital Investment Manager can hold client assets itself through an account with a licensed custodian, or arrange for the client to hold assets directly with one; the second route avoids a separate Arranging Custody permission only where the firm meets the regulator's exclusion criteria, not by default. Either way, that custodian relationship and the firm's own bank account are diligenced separately — banking readiness work here means showing, in writing, which account each client flow touches, and, for the firm's own backers, a clear source of funds behind the regulatory capital itself.