SINGAPORE: A new survey has found that the top concern of ultra-wealthy families in Southeast Asia is that not having a succession plan may lead to feuding within the family.
Over 2 in 5 (41 per cent) of the 129 high net worth (HNW) advisers polled earlier this year said that family disputes due to a lack of succession plans are the foremost worry among their clients, The Straits Times reported, citing a Sept 4 report from Transamerica Life Bermuda.
This is in contrast to North Asia, the Middle East. and Europe, however, where only 27 per cent of HNW advisers said this is their clients’ top worry.
High net worth is defined in the company’s survey as having at least US$1 million (S$1.31 million) in assets, although most of the clients represented in the poll possess more than this.
Transamerica Life Bermuda’s survey polled family offices, wealth managers, private bankers, and insurance brokers. It showed that, aside from succession issues leading to family quarrels, other top concerns for the ultra-wealthy are tax implications and delayed or inefficient asset distribution.
In Southeast Asia, more than a third (35 per cent) of those surveyed said that health problems are the number one reason for the ultra-wealthy to implement or review their succession plans.
Elsewhere in the world, this figure is around 30 per cent.
Fifty-eight per cent of the participants in Southeast Asia said that the least important aim in succession and estate planning is to keep taxes and legal fees down.
In contrast, only 29 per cent of advisers in other parts of the world considered curbing taxes and legal fees least important.
The other goals in succession planning are the preservation of assets, a smooth asset transition to beneficiaries, and business succession.
Among HNW clients who have not taken steps for succession planning, over three out of five (61 per cent) said they were too busy to do so, or they believe that succession planning is an overly complicated process.
In the wake of the Covid-19 pandemic, more ultra-wealthy all over the world showed an interest in succession and estate planning, with over half (54 per cent) saying they wanted to go into action right away or within five years.
While around 11 per cent of HNW clients in 2018 said they were considering succession and estate planning, at present, the figure is around 50 per cent, said the company’s chief commercial officer Jeremy Young. /TISG
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