Asia’s strong economic growth over the last few decades has created a sizeable number of first- generation high-net-worth individuals and ultra-high-net-worth individuals. As this group advances in age, they have shown growing awareness and concern regarding the need for succession planning in order to ensure the long-term economic security of their families, maintain their lifestyles post-retirement, and effectively transfer their wealth to the next generation. It is estimated that the value of global UHNW wealth transferred down through generations within the next 30 years will total nearly US$16 trillion, making it the largest wealth transfer in history.
However, Asian Private Banker has found that such increasing awareness about succession planning has not necessarily translated into significant action taken by this group. In its fourth year of research partnership with Transamerica Life (Bermuda) Ltd., Asian Private Banker has been following the financial protection consumption trends and investigating the market challenges and gaps UHNWIs/HNWIs face in striving for their financial security goals. This report focuses in particular on the factors which are preventing Asian UHNWIs/HNWIs (primarily in Hong Kong and Singapore) from taking actions towards their succession planning. It also examines Asia’s life insurance market and the role that life insurance plays in supporting the financial health and succession planning of Asian HNWIs and UHNWIs, including their successors.
2019 Key Findings:Four years after our initial research on the UHNW/HNW market segment, we have found that Asia’s HNWIs today are still less prepared for wealth transfer/succession planning than their counterparts in other regions — with 57% admitting they have done nothing in regards to estate planning and wealth transfer, compared to 32% in the West.
Our research shows that there are three main challenges/risks that contributed to this lack of preparation: procrastination, lack of communication, and perceived complexity of the process.
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The research was conducted independently by Asian Private Banker, but was made possible through the sponsorship of Transamerica Life (Bermuda) Ltd.