Islamic finance is a fast-growing sector that seeks to conduct financial practices in accordance with sharia, or Islamic law. It is a field that has gained considerable enthusiasm among Western financial institutions, as well as in the Islamic world. And it is an area that financial advisors and their institutions increasingly will have to grapple with, as it holds both significant attractions and worrisome quandaries.
Islamic finance carries a demonstrated ability and vast potential to attract an important client base — primarily Muslims, including the Muslim-American community, but also non-Muslims who are interested in an alternative approach to socially responsible investing. But Islamic finance also is increasingly controversial, as critics raise questions about the field’s legal, regulatory, political and ethical ramifications.