Asia’s wealthy fear losing fortunes

Asia’s wealthy families want to preserve their fortunes across generations, but many still lack basic succession plans, according to a new Lombard Odier survey.

The survey of more than 390 high-net-worth individuals across Asia-Pacific with net investable assets of at least $1 million found that 64.2% of respondents said preserving family wealth across generations was their main priority when considering wealth transfer.

Yet only 26.9% said their family had a full succession plan in place, while 39.4% said they had no succession planning at all. 

The findings expose what the Swiss private bank described as an “intention-implementation gap” among Asia’s wealthy families, many of whom remain underprepared despite growing awareness of succession risks. 

The issue is becoming increasingly urgent as Asia and the rest of the world undergo a massive intergenerational wealth transfer, particularly among first-generation entrepreneurs preparing to pass businesses and fortunes to their children. 

John Woods, Lombard Odier’s Asia chief investment officer, warned that many families risk squandering wealth without stronger governance and planning frameworks.

“This sort of concern around this contradiction is worrisome to me,” Woods said during a roundtable accompanying the report launch.

“If [majority] of the clients we surveyed haven’t really given a major thought to wealth planning, they won’t hold on to their wealth very long,” he added.

Across Asia-Pacific, Japan, the Philippines, Malaysia and Hong Kong stood out for weak succession preparedness. About half of the respondents in those markets said they had no succession plan or felt such planning was not relevant to them.

The survey also found that many older family members have yet to meaningfully involve younger generations in governance and wealth discussions. More than a quarter of Baby Boomers surveyed said their families had not discussed having a clear common purpose for wealth. 

Louisa Loo, Lombard Odier’s head of wealth planning for Asia, said many wealthy Asian families continue to delay succession discussions because of cultural sensitivities and a lack of urgency. 

Communication remains a major hurdle, particularly in Asia, where discussions around inheritance and wealth transfer are often considered taboo. Nearly 29% of respondents identified a lack of open communication as a key governance challenge. 

“When something unexpected happens, which often does, many families will be completely unprepared,” she said.

CNBC