The next generation of wealthy families in Asia is increasingly ambitious and has a different mindset for parents in holding and running businesses, becoming one of the biggest challenges in the process of inheriting assets, according to the report published on November 11.
According to a report by UOB Bank, Boston Consulting Group (BCG) and the Business School of the National University of Singapore (NUS), 91% of first-time asset creators want corporate leadership to be maintained in their family.
However, nearly 1/4 of them said that their heirs were not very interested in taking over the business.
The report also shows that more and more next-generation leaders are willing to hire outside experts to run businesses, while still holding ownership.
However, many founders are still determined to opposes digitalization because they are concerned that outsiders may misuse resources or reduce the impact of the family.
This comes as Asia emerges as the world's fastest growing financial center, with total personal assets expected to reach $99 trillion by 2029.
Mr. Chew Mun Yew - Director of UOB Private Bank, commented: "The next trend of wealth in this area will revolve around the complex task of transferring assets, when many Asian enterprises are quite young and do not have a stable and methodical governance system".
The report shows that there are four main models of individuals with large hectares of assets (HNWIs), each with different expectations for inheritance:
Traditional founders, usually over 60 years old, closely associate businesses with family identities, hoping that their children and grandchildren will continue to maintain the business.
Modern founders, get rich in emerging fields, tend to separate businesses and families, consider business management as independent of family interests.
The next generation of leaders, or those who inherit businesses, strive to harmonize the preservation of heritage and create a unique direction for their children.
The rich do not run businesses, create assets from professional careers or inherit, focus on preserving assets and are less bound by social standards.
The report emphasizes that when planning inheritance, it is also necessary to consider the wishes of the next generation.
The next generation "increasely prioritizes pursuing personal ambitions, such as self-startups or creating social impacts, rather than preserving family businesses".
Therefore, digitalization is considered a practical solution.
The difference in thinking among the rich in Asia is also reflected in the investment portfolio. In the young generation (30-35), 52% hold stocks and 33% own digital assets in their three main assets.
On the contrary, the older generation, aged 60 and over, favor traditional assets, with nearly 70% prioritizing investment in real estate.
