Report Case 7

RMN
September 22, 2015

Case 7 Report : Islamic Wealth Management : A Review On The Dimension Of Values

BASIC IDEA OF THE PAPER

This paper is a review on the dimension of values on the Islamic Wealth Management.
Wealth should be in balance as a wealth can be beneficial or harm to humans. It depends on how
the people manage and operate the wealth. Even Islam has given the humankind the right to own,
generate and spend wealth, it has to be in the correct path means it has to be in line with the demands of keeping the five main interests of religion, life, intellect, progeny and wealth.Thus humankind as the vicegerents or khalifs hold the duty and responsibility to manage wealth carefully
based on Islamic law. To own, generate and spend the wealth in the right path and way, the humankind especially Muslims need to appreciate values such as gratitude, careful, accountability,
wise, fair, wisdom, productivity, and futuristic as these values will guide the planning, spending,
and managing of wealth wisely, in order to ensure ones well-being in the world and the hereafter.

THE CONCEPT OF WEALTH MANAGEMENT IN ISLAM

Wealth management is a term that formed from the combination from two words. They
are Wealth and management. Management means the process of planning, organizing,
leading and controlling the efforts of members and using all the resources to archieve stated goals
as defined by S. Hadi Abdullah in his presentation The Professional Manager . Wealth refers
to all things that can be controlled, owned, and used normally. Thus the term wealth management
means description of managing, maintaining, operating, controlling and planning to develop
wealth in the near future in accordance with the set of rules and laws. Wealth management is a
process of ownership (al-tamalluk), acquiring (al-takasub) and consuming of wealth (al-istihlak)
in accordance with the rules of Islam. The process of course involves a series of actions and
deeds of a person in managing, operating and generating wealth as laid down by Allah SWT. It
starts from the moment how the wealth is acquired , where it is spent and how the wealth is de-

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veloped for both goodness in the world and hereafter. The person who do the deed is absolutely
the humankind who acts as trustee of the wealth owned.

IMPORTANCE OF WEALTH MANAGEMENT IN ISLAM

Wealth is considered one of the requirement in human life. The correct management of
wealth not only lead to the happiness of human happiness in the world but also associates it with
happiness in the hereafter. Therefore wealth really needs good management in order to attain
happiness in both world and hereafter. The reasons include to avoid wealth freezing. Wealth
freezing refers to the actions of holding wealth without any financial activities like spending, investment or charity. The freezing action avoids the sharing process between the wealth owners
and the community. Allah SWT also forbids the freezing of wealth in Surah at-Tawbah 9:34-35
which means :

O ye who believe! there are indeed many among the priests and anchorites, who in
Falsehood devour the substance of men and hinder (them) from the way of Allah. And there are
those who bury gold and silver and spend it not in the way of Allah. Announce unto them a
grievous penalty-On the Day when heat will be produced out of that (wealth) in the fire of Hell,
and with it will be branded their foreheads, their flanks and their backs. This is the (treasure)
which ye buried for yourselves: taste ye, then the (treasure) ye buried!

The freezing of the wealth also hinder the wealth that planned by the wealth owners to be
managed and distributed by theirs beneficiaries after their death. The heirs will be denied any
benefit and prevented from enjoying the wealth. This practice contrasts with the interests, which
are protected inIslam and also does not reach maqasid al-syariah itself. So the wealth owners
must be proactive in managing and distributing the wealth so that the benefits reach all the communities and heirs who are eligible to enjoy the wealth after the death of wealth owners. They
can also appoint wealth administors to enable the distribution process by Islamic inheritance, endowments (waqf) and hibah by nominating members of their immediate family who are really
entitled to receive their savings and provide them a wisayah letter.

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Secondly, wealth management is important as it also enable the circulation of wealth,

which mobilizes the wealth and let the wealth to be developed in a lawful manner that is in accordance with Islamic teachings. For example, through charity, hibah, endowments (waqf) and so
forth, the wealth could be distributed to beneficiaries and communities to be used to generate or
invested in activities such as financial product and Islamic banking that can generate wealth in
Accordance in Islamic teaching without being affected by the elements of riba (usury) or gharar
(uncertainty). Through endowment, the wealth also can provide benefits to all people in the
communities.

Third importance of wealth management is to eliminate madhmumah nature. The madhmumah might be represented by both sides. The rich people (wealth owners) and the poor (the
receiver). The rich may be too obsessed with the wealth and does not want to share meanwhile
the poor may developed the feeling of jealousy of the richs wealth which lead to the feeling of
misery, felt because of the poverty. So the distribution of wealth via Zakah from the payer (the
rich) to the poor for example can diminish the madmumah nature by generating generous feeling
into the payer and reduce the burden on the poor thus eliminate their miserliness feeling.

Forth, the wealth management can strengthen economic ummah. The gaps between the
rich people and the poor people can be narrowed down by using the wealth contributed via zakah
to reduce the poverty in the Muslim community by enabling the recipients to participate in the
entrepreneur programmes where the zakah money is used as the capital assistance in starting the
recipients bussinesses provided the poor people are keen to participate in the businesses in order
to elevate their life status. Who might know someday, they are free-listed as the recipients and
eligible as the zakah payer after they succeed in their own bussineses. The Muslim as well as the
country will benefit in term of economic dimension if they get the wealth management runs well
throughout the zakah.

Fifth, the wealth management can act as social justice. The wealth certainly is to be
shared and through zakah the wealth is able to be purified and cleaned from impurities of the
sources. The zakah given can be the spiritual development for both givers and recipients as zakah

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acts as a reminder for both that wealth is not something immortals and must be shared and enjoyed together.

VALUES IN WEALTH MANAGEMENT

In order to let the wealth management runs so well within the system, the one who is responsible must have certain values in managing the wealth. The values are what keep them in the
straight path without diverted to the path that is not in accordance in Islam. The values mentioned
in the paper are gratitude, careful, accountability, fairness, wisdom, productive and futuristic.
Each value plays important rules in guiding the heart of the main player of the wealth management in . Humankind as trustee sometimes is fragile and having wavering heart is quite common.
To make their work runs in honest, they need to keep their values checked at all times. The gratitude is the values that appreciate the wealth as a gift from God as well as clean the heart of individuals from nature of envy, greed, miserly, malicious and so on. If we have this value, we certainly would not agree on bribery, fraud, abuse and so on acts on the wealth management. A gratuitous human always find wealth trough halal sources, appreciate the wealth and never forget the
poor through endowment, zakat and donating wealth as the sign of giving back.

The careful value also important as the owner of the wealth must investigate where his or
her source of wealth is coming from and where it is spent. So the guidelines are to check the
source of wealth whether it is halal or not, free from usury, fraud, taking rights of others and so
forth. Careful is important as use must be careful with what you generate as the wealth becomes
the source to buy food and drinks and certainly may become your blood and flesh (as mentioned
in Hadith from the source at page 199) and also shape the human heart. The right of sign action
of careful resulted in obedient servants to Allah.

The accountability value also important as the accountability value can guide the right
actions by taking Allah The Seer, The Knower as the non-stop watcher of our action. It means
that one that holds the responsibility for the wealth management has to be accountable even when
it comes up to the high profile case. It is proven in Islam that from a sense of accountability,

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Sayyidina Caliph Abu Bakar did not hand over the land of Prophet Muhammad SAW to his son
when demanded because of the wealth already handed over to public treasury as a trust.

The forth value held dear in wealth management is fairness. Being fair as putting things in
place and giving rights to the rightful without oppressing the rights of others are certainly performed in faraid where the heirs are given their rights in reasonable amount, wills and hibah
where the illegible heirs like adopted children get their shares of wealth and through endowment
where it is an efficient way to fullfil the needs of society for education, health, home, worship
and others. The life and hereafter reward ship in term of rightful practice will be for both world
and hereafter life. For example the right wealth management give the worldly reward to the owner of wealth and his or her beneficiaries and also the nonmaterial reward for hereafter life. By this
the balance between the two world are achieved. The fairness also laid in the trust holders. In
Surah al-Anam it is clearly mentioned about the giving rights to the orphans without reducing
the amounts except for some permitted amount.

The fifth value is wisdom. Through wisdom or al-rushd in managing wealth basically can
be interpreted by two angles. The first one is to select the appropriate person to guard the orphans wealth. The second angle would be the wisdom in spending wealth especially in deciding
the productive channel that gives continuous benefit without element of syubhah. In order to do
that the one dealing with the wealth management need to seek knowledge because by using the
knowledge the person know how to differentiate between the right and the wrong way in handling the wealth.

The sixth value is productive. Even though usury is forbidden in Islam, Islam never forbid
the Muslim to aim for growth in wealth. If the non-Muslim thinks of usury as their source in multiplying the money, the value of productivity in Islamic wealth management is more towards
avoiding waste and focusing on generating goodness. A productive Muslim is one who capable in
generate multiple benefits without contravening Islamic rules. The avoidance of freezing element
enables the return of investment funds to be channeled to the investor and the investor would
spend it for benefits for all.

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The last but not least value is Futuristic. In wealth management futuristic is the most significant value as the owner must think of the future for both dimension, during the life and also
after the death. So the decision that made by the owners must take account of all possibilities and
the welfare of the beneficiaries even after their death. They must be appropriate proportions for
wealth to be spent and wealth to saved for beneficiaries. Even the endowment done before his or
her death (owner of wealth) the benefits will be also flows into his or her good deeds even after
the death.

CONCLUSIONS

From the paper we could say that wealth management is really crucial in both life and
hereafter life. The right wealth management could contribute to beneficiaries and communities
via hibah, endowment, sadaqah and will. But the pillars that support all the right wealth management run as in Islamic accordance are the right values owned by the wealth owners, and the
trustees. The values mentioned are gratitude, careful, accountability, fairness, wisdom, productive and futuristic. By applying these values, the wealth management would be able to avoid
wealth freezing, ensuring circulation of wealth, eliminating madhmumah nature, strengthen the
ummahs economic, and acts as social justice for all angles. The goodness is not only focused for
the present it is for the future and the life after the death which is truly desired by the God (Allah)

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REFERENCES
1. Nor Azzah Kamri & Mohd Zaidi Daud, Islamic Wealth Management : A Review On the Dimension Of the Values, Jurnal Syariah, Jil. 19, Bil 3 (2011):187-212
2. Faizah Hj. Ismai, Asas-asas Muamalat Dalam Islam (Kuala Lumpur : Dewan
Bahasa dan Pustaka, 1995)
3. Ahmad Hidayat Buang, Appreciation of Syariah Principle in Wealth Management in Contemporary Malaysia Society, Shariah Journal, 16/Special Edition (2008):
563-564