Asia’s Succession Time Bomb: Most Family Businesses Have No Plan
Asia is entering one of the largest intergenerational wealth transfers in its history, yet nearly three quarters of family business owners remain without a fully developed succession plan – a gap that threatens the long-term stability of the region’s most influential enterprises.
A new Sun Life survey reveals how unprepared many families are, despite recognising the urgency of safeguarding their legacies.
Family businesses form the bedrock of Asia’s economies, accounting for 85 percent of companies in the Asia Pacific region. Despite this central role, only 27 percent of business-owning families have a complete succession framework in place, according to the survey.
«A huge intergenerational wealth transfer is already underway in Asia, so it’s vital that business owners take steps now to prepare for the future and safeguard their legacies,» said David Broom, Chief Client & Distribution Officer at Sun Life.
Intent Is High, Execution Is Low
While 94 percent of families say they intend to establish legacy plans, the majority remain in early stages: a quarter have partial plans, another quarter are still developing them, and nearly one fifth admit they have nothing in place but plan to act «someday».
The gaps vary widely across markets. Vietnam shows the lowest preparedness, with only 14 percent having structured succession plans. Indonesia leads with 39 percent. Hong Kong stands at 20 percent and Singapore at 28 percent.
Communication Failures Deepen the Vulnerability
The next generation often lacks clarity about the future of the business. Only 44 percent of those currently working in their family enterprise say legacy plans have been fully communicated to them. Where the next generation is not involved, that figure drops to 27 percent.
Formal family meetings are the preferred channel for these conversations, chosen by 61 percent of respondents, followed by one-on-one discussions and written documentation.
What Families Want to Protect
The top priority for business-owning families is financial protection: 69 percent say securing their family’s long-term financial safety is the most important factor in legacy planning. Reducing potential disputes through a clear estate plan (54 percent) and building enough wealth to pass to the next generation (51 percent) follow closely.
Two thirds want their heirs to reinvest wealth for long-term growth – whether through financial assets, life insurance or reinvesting in the family business.
Succession Crisis Driven by Generational Drift
A widening generational gap has become a central threat. Only 40 percent of current family business owners believe the next generation is fully willing to take over. Among heirs not yet involved in the business, that willingness shrinks to 31 percent.
Half of those reluctant to inherit cite the desire to maintain independence. Others point to fear of responsibility, lack of interest, or differing values and vision.
«Asia’s family businesses are at a crossroads caused by growing generational differences. Younger generations are seeking independence, purpose and balance,» Broom added.
Demand Rising for Expert Guidance
Less than half of family business owners have ever sought professional financial advice. Among those who have – or intend to – expert knowledge ranks as the most important factor, followed by long-term generational planning and personalised service.
Preferences diverge: 36 percent favour individual subject-matter experts, 23 percent prefer a collaborative family office model, and 32 percent would like a hybrid approach.
«There is clear demand for specialised, personalised insights, and for both individual experts and collaborative family office models,» said Broom. «Proactive professional advice can help business owners achieve their succession goals and preserve the legacies families work so hard to build,» he added.
