SINGAPORE, Sept 4 — A recent poll reveals that ultra-wealthy individuals in South-east Asia are more concerned about potential family disputes arising from inadequate succession planning compared to their counterparts in other regions.
According to The Straits Times (ST), a survey conducted between early April and mid-May with 129 high net worth (HNW) advisers revealed that 41 per cent of their clients in South-east Asia are most concerned about family disputes.
This figure surpasses the 27 per cent reported in North Asia, the Middle East, and Europe.
In addition to family conflicts, concerns among HNW individuals also include tax issues and delays or inefficiencies in asset distribution, according to a report by Transamerica Life Bermuda today.
ST reported some 35 per cent of participants cited health issues within the family as the primary reason for high net worth clients in the region to review or establish succession plans, compared to around 30 per cent in other regions.
While family offices are the leading concern in the succession and estate planning survey, representing a third of those surveyed. They are followed by wealth managers, private bankers, insurance brokers, and others.
Over half (58 per cent) of those surveyed indicated that minimising taxes and legal fees is the least important goal in succession and estate planning. This is nearly double the 29 per cent reported in other regions.
The survey also highlighted other key objectives for succession and estate planning, such as asset preservation, smooth asset transition to beneficiaries, and business succession — goals that were equally emphasised across various regions.
Additionally, over half of the respondents noted an increased awareness and interest in succession planning among their high-net-worth clients since the pandemic. Around 54 per cent reported that their clients are eager to act either immediately or within the next five years.
Compared to a 2018 survey conducted on a larger scale, chief commercial officer Jeremy Young told ST that high-net-worth clients are now more receptive to the concept of succession and estate planning.
“In comparison, with the caveat that it’s a different methodology, about 11 per cent in 2018 said they wanted to take action within the next five years if they didn’t have a plan already. Now we’re seeing something in the region of 50 per cent,” he said, as quoted by ST.
The survey indicated that 61 per cent of clients who haven’t yet engaged in succession planning are either occupied with other priorities or find the process too complicated.
Young attributed the increased interest in planning to the pandemic’s stark reminder of health issues and the growing need for intergenerational wealth transfers as business founders age.
The poll’s findings indicate that while lawyers are the primary source of advice for succession and estate planning overall, fiduciary service providers, like trust companies, are nearly as popular in the region. Trusts, foundations, and wills are the most commonly used tools in these planning efforts.
However, 31 per cent of high-net-worth clients in South-east Asia primarily use joint accounts for their succession and estate planning, a tool that is less favoured in other regions.
Among those surveyed, 40 per cent were from Singapore and other South-east Asian markets, including Malaysia and Thailand.
The firm defined HNW individuals in the survey as those with assets of US$1 million (RM4.3 million) or more. However, most respondents actually represented clients with significantly higher net worths.
