A survey of 129 high net worth advisers between early April and mid-May found that 41% said their clients in the region are most worried about family disputes. — The Straits Times
SINGAPORE: The super rich in South-East Asia are more worried that a lack of succession planning could lead to family disputes than those who are well-heeled in other regions, a poll finds.
A survey of 129 high net worth (HNW) advisers between early April and mid-May found that 41% said their clients in the region are most worried about family disputes.
This is higher than the 27% in North Asia, the Middle East and Europe.
Other concerns that the HNW individuals have are tax implications and delayed or inefficient asset distribution, said life insurer Transamerica Life Bermuda on Sept 4.
Family offices top the list among those polled in the succession and estate planning survey, accounting for a third of them. They are followed by wealth managers, private bankers, insurance brokers and others.
About 35% of participants ranked health issues within the family as the top trigger for their HNW clients in the region to review or put in place succession plans. In other regions, it is about 30% of those polled.
More than half (58%) of those surveyed said minimising taxes and legal fees is the least important goal for succession and estate planning. This is almost twice (29%) that of the other regions.
The poll said other objectives were: asset preservation, ensuring a smooth asset transition to beneficiaries, and business succession. These were evenly rated in the findings from other regions.
More than half of the respondents saw a rise in their HNW clients’ awareness and interest in having succession and estate planning post-pandemic. About 54% said their clients wanted to act immediately or within five years.
Compared with a 2018 survey the firm conducted on a bigger scale, chief commercial officer Jeremy Young said the HNW clients are warming up to the idea of succession and estate planning.
“In comparison, with the caveat that it’s a different methodology, about 11% 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%,” he said.
Of the clients who have not done such planning, the poll found that 61% are either busy with other priorities or think the process of doing so is too complex.
Young said the pandemic made the impact of health issues real to people. A ramp-up in intergenerational wealth transfers, as founders of businesses get older, is another reason for the rise in uptake.
“Despite it being lower in some jurisdictions, we’re seeing changes to regulation, which includes taxation and estate duties. It is starting to happen across the globe and that’s making the HNW group a lot more aware that they need to do something,” Young said.
For instance, Brazil is set to levy higher estate duties across the board and the HNW clients want to know how to manage the transfer of assets without having to liquidate or use cash to manage inheritance tax.
This can be done through the use of a life insurance policy, Young noted.
Findings of the poll showed that in general, lawyers are the main source of advice in succession and estate planning. — The Straits Times/ANN
