Islamic Finance Advisors: An Overview

islamic finance advisors

In this article, I will delve into the expert guidance provided by Islamic Finance Advisors like Azzad Asset Management, Amanah Advisors, IFG, and other industry leaders, to explore the immense opportunities for Muslim investors.


An Introduction to Islamic Finance Advisors

Islamic finance has experienced rapid growth in recent decades as Muslims seek financial services that adhere to Sharia principles. At the core of Islamic finance is the prohibition of riba, commonly translated as interest. As the Quran states:

Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. Quran 2:275

This poses a challenge for Muslims looking to invest and build wealth in a modern financial system built on interest. A new field of Islamic financial advisors has emerged to address this need. As CNBC reports, “The universe of Shariah-compliant mutual funds and equity funds has grown to more than 800 today, from just a handful in the 1990s.”

Islamic advisors help clients navigate halal investing principles to construct Sharia-compliant portfolios. This involves screening investments, selecting alternative financial products, and guiding major financial decisions according to Islamic law. Advisors versed in Islamic finance are in growing demand as the industry expands.

When selecting an Islamic financial advisor, key factors to consider include:

  • Certification and specialization – Look for accreditation in Islamic finance specifically. General financial credentials are not enough.
  • Experience – Choose an advisor with a solid track record advising Muslim clients. Check client reviews.
  • Investment approach – Understand the advisor’s philosophy and process for constructing halal portfolios.
  • Fee structure – Many adhere to Islamic restrictions on interest by using fixed fees instead of percentage of assets.

By selecting a qualified Islamic finance advisor, Muslim investors can effectively build wealth in compliance with their faith. Professional guidance enables informed decisions on halal stocks, halal crypto investing, Islamic banking, and major financial milestones like homeownership, retirement, and estate planning.


Services Provided by Islamic Financial Advisors

Islamic financial advisors offer a range of services to help clients manage their finances according to Sharia principles:

Investment Screening

One of the core services is screening potential investments for compliance with Islamic law. This involves analyzing companies and funds to avoid prohibited industries and financial practices:

  • Interest (riba) – Advisors exclude bonds, savings accounts, and any interest-bearing investments.
  • Sin stocks – Stocks connected to haram activities like alcohol, tobacco, pork, adult entertainment, gambling, and weapons are avoided.
  • Excessive uncertainty (gharar) – Derivatives and options with highly uncertain payoffs are typically excluded.

Thorough halal stock screening enables clients to invest in line with their values.

Sharia-Compliant Investments

Advisors are well-versed in halal investment options to construct optimal portfolios after screening out haram investments:

  • Sukuk – Islamic bonds based on asset-backing and profit sharing rather than interest.
  • Islamic mutual funds – Professionally managed investment funds composed of Sharia-compliant assets.
  • Islamic fintech – Apps providing halal crypto trading, robo-advising, and more.
  • Real estate – Residential and commercial real estate ownership complies with Islamic finance.

Guidance from a specialist allows clients to fully utilize available halal investments.

Islamic Banking and Finance

Advisors also assist with banking services and major financial decisions in accordance with Sharia:

  • Islamic loans like murabaha for big purchases such as homes and cars.
  • Halal retirement planning – Aligning investments, inheritance, and estate planning with Islamic principles.
  • Zakat and charity – Calculating annual wealth tax and coordinating donations.

Their expertise in this niche field helps ensure major financial milestones align with a client’s faith and values.


Choosing an Islamic Financial Advisor

When selecting an advisor to help with Islamic financial planning, there are several key factors to consider:

Specialist Credentials

Look for certification in Islamic finance such as:

  • CIPA – Certified Islamic Professional Accountant
  • CISI – Certified Islamic Finance Specialist
  • CIMA – Certified Islamic Management Accountant

General financial credentials like CFP are insufficient. Proper Islamic finance training is essential.

Experience and Track Record

  • Ask how long they have been advising Muslim clients.
  • Verify they have helped structure halal investment portfolios.
  • Check client testimonials and reviews regarding their expertise.

Seasoned experience ensures they can navigate this complex field.

Investment Philosophy

  • Understand their approach to portfolio construction and risk management.
  • Ask how they conduct halal stock screening.
  • Discuss their process for advising on major decisions like Islamic home financing.

Aligning with their investment philosophy brings peace of mind.

Fee Structure

Choose a fee model that aligns with your preferences.

Vetting an advisor thoroughly gives confidence in their specialized expertise guiding major financial decisions.


Islamic Finance Principles and Restrictions

Islamic financial advisors guide clients based on the fundamental principles and prohibited activities in Sharia law:

Key Principles

  • Prohibition of riba (interest) – The Quran expressly forbids riba, so advisors avoid interest-bearing investments and debt.
  • Prohibition of gharar (excessive uncertainty) – Speculation and highly uncertain investments like conventional insurance and derivatives are avoided.
  • Profit-and-loss sharing – Modes like musharakah and mudharabah joint ventures are encouraged for investment and financing.
  • Asset-backed financing – Underlying assets must back all Islamic financial transactions.

Restricted Activities

Advisors screen out the following prohibited sectors and practices:

  • Alcohol, tobacco, adult entertainment, pork, gambling, weapons
  • Conventional insurance and derivatives
  • Short-selling, margin trading, day trading
  • Investments without underlying tangible assets


  • Each Islamic bank and fund has a Sharia Supervisory Board composed of Islamic scholars to rule on financial product compliance.
  • Standard-setting bodies like AAOIFI issue guidelines enforced through the boards.

These principles deeply impact portfolio construction and asset allocation.

Impact on Investing

  • Equities must pass sector screening for permissibility.
  • Fixed income is limited to sukuk Islamic bonds.
  • Mutual funds and ETFs must be Sharia-compliant.
  • Real estate, commodities, and private equity represent major asset classes.

Specialist guidance navigates the complexity these restrictions create.


Growth and Prospects of Islamic Finance Industry

The Islamic finance industry has seen rapid expansion in recent years:

  • Assets projected to surpass $3.5 trillion by 2024, according to Fitch.
  • Islamic banking assets grew 10% in 2020, per the IFSB.
  • Over 1,400 institutions now provide Islamic financial services.

Several key factors fuel this growth:

Rising Demand

Mainstream Appeal

  • Principles like ethical investing and profit-sharing attract conventional investors.
  • Provides an ethical alternative to conventional finance.

Product Innovation

  • New halal fintech solutions like robo-advisors expand access.
  • Cryptocurrencies aim to align with Islamic finance.

Geographic Expansion

  • Islamic finance is going mainstream in Muslim-majority countries like Indonesia and Malaysia.
  • And spreading into new regions like Africa and East Asia.

Rising global demand for Sharia-compliant financial services will provide opportunities for specialized advisors well into the future.



Islamic financial advisors are critical in guiding Muslim investors and providing Sharia-compliant services. As the industry experiences rapid growth, their expertise enables clients to build wealth in line with their faith effectively.

Essential points covered in this article:

  • Islamic advisors help screen investments, select halal options, and structure major financial decisions to comply with Sharia principles.
  • When choosing an advisor, verify their credentials, experience, fee model, and investment philosophy align with your needs.
  • Core Islamic finance practices involve avoiding interest, excessive uncertainty and prohibited industries while emphasizing profit-sharing and asset-backing.
  • The Islamic finance sector is projected to surpass $3.5 trillion as demand rises across the Muslim world and beyond.

With the complexity of aligning faith and finances, guidance from a qualified Islamic finance advisor provides peace of mind. Their specialized knowledge of structuring portfolios, Islamic banking, inheritance, philanthropy, and more enables informed decision-making. As the industry grows globally, these specialists will remain indispensable to Muslim investors seeking financial success without compromising their values.

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