Sun Life: Most Asians Fear Wealth Won't Last Beyond NextGen
Despite abundant wealth in Asia, most families worry that it will not be sustained after the next generation which they view as poorly equipped to manage inherited riches, according to a survey by Sun Life.
More than half of individuals (60 percent) fear that their wealth may not last beyond the next generation, according to a survey by Sun Life entitled «Passing the torch: Building lasting legacies in Asia». 55 percent worry that their heirs are not financially equipped to manage inherited assets, while only 31 percent are confident they will uphold their wishes around transferring, preserving and growing wealth.
Some major factors cited include diverging priorities among younger generations (58 percent), limited engagement (39 percent), misinterpretation of values (30 percent) and weaker intergenerational bonds (29 percent).
Legacy Goals
In terms of goals from transferred wealth, 59 percent want their legacy invested for long-term wealth creation through financial assets, life insurance or the family business. 59 percent also want to meet essentials such as housing and healthcare (59 percent), followed by funding
education from school to college or vocational training (56 percent).
In addition to just passing on wealth (41 percent), the legacy desired includes family traditions (15 percent) and wanting to have a personal influence on family and friends (13 percent).
Insufficient Planning
While 70 percent say that having protection in place to ensure their family’s financial security is the most important factor in legacy planning, many remain unprepared.
Only 19 percent said they feel their legacy arrangements are fully prepared if they were to pass away today, with the figure rising modestly to 29 percent among affluent individuals. Just 10 percent have completed and communicated their legacy plans, 45 percent have partial plans and 31 percent admit to having nothing at all.
44 percent of legacy planning conversations are currently informal or casual, but just 27 percent state this as the best setting.
Lack of Financial Awareness
There is also limited awareness about tools for wealth planning. 70 percent know about wills and estate planning documents but just 38 percent use them. Similarly, 67 percent are aware of financial advisors but only 36 percent have sought professional advice.
«Families are talking but not planning,» said David Broom, chief client & distribution officer at Sun Life. «While more people recognize the need for open conversations about wealth and inheritance, many of these discussions still lack structure and follow through, leaving important legacy decisions unresolved or misunderstood. Formal discussions with the whole family give clarity, prevent conflict, and ensure a more enduring legacy.»
The survey is based on responses from individuals across Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Vietnam, highlighting the attitudes, behaviors and aspirations surrounding legacy planning in Asia.
