Few rich Asian families have a proper wealth transfer plan

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Survey shows Asian families more concerned about transfer of values

Few rich Asian families here have a proper wealth transfer plan in place, raising concerns that the next generation might not be able to manage their inheritances well.

The findings from a new survey noted that only 31 per cent of high-net-worth families polled across Asia had established a complete plan to pass on their wealth.

And only 19 per cent of the 80 wealthy individuals surveyed here had done so - the lowest among the six markets polled.

RBC Wealth Management quizzed 425 respondents in Singapore, Hong Kong, China, Indonesia, Taiwan and Malaysia.

Ms Tho Gea Hong, RBC's head of wealth management for Southeast Asia, said: "Discussing and preparing for the transfer of wealth can be very complex and time consuming, not to mention an emotional issue for families.

"Many of Singapore's high-net-worth individuals have complex wealth planning needs, due to diverse asset bases, so without a full and comprehensive wealth transfer plan in place, they may be leaving their heirs adrift."

The study also found more than half of respondents in Singapore have not started any type of formal wealth transfer planning, with only 34 per cent of respondents here having prepared a will.

The survey also noted that Asian families are more concerned about the transfer of values than wealthy families elsewhere, with 64 per cent of the respondents across the region saying that their inherited wealth came with conditions.

This stands in stark contrast with respondents from Britain and North America, where only 26 per cent said their inheritance had conditions attached.

RBC Asia managing director Mike Reed added that it is uncommon for Asian families to discuss wealth transfers among themselves too.

"I think part of this is because parents want to avoid creating entitled heirs; they don't want their children to lose the incentive, drive and ambition to work."

Indeed, 26 per cent of respondents in Asia claim their primary concern regarding wealth transfer is the fear that their beneficiaries will lose motivation following their inheritance, compared with just 5 per cent of those in Western markets feeling the same.

Many families are not only tackling the complex task of transferring a global portfolio of assets, they are doing so without prior knowledge of how such inheritances should be structured, RBC said.

However, RBC noted that the lack of preparation for a wealth transfer could itself affect benefactors' confidence in the next generation; 70 per cent of those who did not have a plan said they lacked confidence in their children's ability to grow and preserve the wealth.