As the world’s wealth changes hands, will Asian fortunes fade or flourish?
The way this generation manages its legacy will not only determine its own future but also set the standard for every generation that follows
BUILDING family wealth often requires a lifetime of effort, yet it can unravel in as little as two generations. An oft-quoted study suggests that around 70 per cent of families see their wealth dissipate by the second generation, and up to 90 per cent by the third.
While many families defy this trend and successfully preserve their legacy, these figures underline the complexities of sustaining wealth across generations, with factors ranging from inadequate estate planning by the first generation to a lack of financial awareness among subsequent generations.
With the largest intergenerational transfer of wealth in human history now underway – and an expected US$5.8 trillion set to change hands in Asia Pacific by 2030 – Asia’s ultra-high-net-worth (UHNW) families face both a significant opportunity for lasting prosperity and a real risk of reinforcing the “three-generation curse”.
Why traditional approaches fall short
Most wealth planning focuses on the “what” (assets) while overlooking the “why” and “how” of preservation. Technical aspects such as tax and investment strategy, while important, address only part of the challenge. Family legacy is fundamentally about people, not portfolios.
A 2024 Deloitte report found that 37 per cent of Asian families currently lack succession plans, leaving them vulnerable to legal disputes and family conflict. Meanwhile, heirs frequently report feeling unprepared to receive their inheritance, citing limited financial education and lack of engagement in family planning.
A PwC NextGen survey highlights the depth of this challenge. Just 40 per cent acknowledge having robust governance structures, while around half of family businesses worldwide have such frameworks in place. Over three-quarters of Asia-Pacific next-generation members also report “low levels of trust between theirs and the current generation”.
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This disconnect is especially pronounced in Asia, where the speed of wealth creation in recent decades has often outpaced the development of strong family governance. Many first-generation entrepreneurs have devoted their lives to building their businesses and assets. However, the skills needed to create wealth are not always those required to pass it on. The process is as much about cultivating relationships and shared values as it is about managing balance sheets.
How families leave lasting legacies
Through our work with families across generations, several common themes characterise the most successful examples.
Start early, adapt continuously
Families most likely to succeed start the process sooner rather later – ideally as soon as financial complexity and children’s maturity warrant engagement. They start with an open dialogue about values, goals, and expectations. This proactive approach allows time for financial education and mentorship, helping to build a relationship between the senior and junior generations and a foundation for the phased introduction of legal and governance structures.
Delaying planning until a triggering event – such as the illness or retirement of a founder – often results in rushed decisions, missed opportunities, and a greater risk of family conflict. Younger generations often recognise this urgency. They worry that the longer the current generation delays retirement, the harder it will be for them to make an impact when they finally take over. After all, a longer runway to succession reduces the lead time for learning the ropes.
Early planning also enables regular reviews and updates, allowing strategies to evolve with changing family dynamics, regulatory shifts, and market conditions.
Getting the structures right
Family wealth may come in the form of businesses, as well as investments, property and other assets. They may be owned and managed through different companies, as well as family offices and wealth managers. Working out how these assets and relationships should be passed on will depend on the shape of the family and its longer-term objectives.
Some families maintain business control to preserve common purpose and identity while building generational wealth. Others prefer collective asset management after selling the founding business, accommodating younger generations’ diverse interests.
In a jurisdiction like Singapore, a key advantage is the absence of an estate, gift, or inheritance tax. This allows UHNW families to focus their efforts on governance, asset protection, and succession rather than on tax planning. Strategic vehicles like trusts, foundations, and variable capital companies (VCCs) protect assets, maintain confidentiality, and ensure family vision carries forward across generations.
Whatever structure a family opts for, it’s important that there is clear communication among decision-makers and broader family consensus on governance processes. Families also should not underestimate the importance of engaging trained professional advisers who can act as trusted partners, particularly as their needs evolve and become more complex. External advisers often play a neutral and facilitative role, helping families to identify, establish, and maintain the structures best suited to their needs at each stage of their growth.
Formalise governance and communication
As family businesses across Asia grow in scale and complexity, there is growing consensus on the importance of establishing strong family governance frameworks to ensure continuity of the family business and the legacy, and to engage with the next generation.
Whether implemented formally or semi-formally, governance structures such as family councils, assemblies, and constitutions help define roles, clarify decision-making processes, and set clear expectations for succession. They also offer a valuable forum for managing conflicts, addressing a key concern for many families in Asia where open discussion of disputes is often avoided.
We also see families creating structured programmes for financial literacy, business exposure, and leadership development and embracing next-generation councils where younger members can practice governance skills and contribute meaningfully to family decisions. With the goal of developing stewards who understand both privilege and responsibility, this includes exposure to philanthropy, where many families find common ground between generations while making meaningful societal impact.
A collaborative approach
Recent research highlights a shift in expectations for wealth management advisers, who now play a key role in orchestrating a network of experts. According to a 2024 Cerulli Associates survey, “cultivating a network of multidisciplinary experts” is among the top best practices, reflecting the increasing complexity of modern wealth. Effective management now requires expertise spanning tax law, legal structuring, and family dynamics, all areas beyond traditional investment advice.
As a result, services beyond investment are essential to the high-net-worth individual’s relationship with a wealth management firm. Families are increasingly assembling multidisciplinary teams, including estate lawyers and tax specialists, with wealth managers playing a crucial trusted facilitator role.
Learning by doing
When it comes to wealth transfer, first-hand experience makes all the difference. Those who have navigated inheritance themselves become far better at planning their own legacy.
An industry study found that nearly a third of people who have received an inheritance previously have comprehensive wealth transfer strategies in place. Having gone through that process, they appreciate the value of open family dialogue and are more likely to have that conversation with their children or grandchildren.
For families in transition, this insight is a powerful call to action. The way this generation manages its legacy will not only determine its own future but also set the standard for every generation that follows.
Preparation breeds preservation. Taking deliberate action and getting it right today will turn this generation’s experience into the next generation’s advantage.
The writer is Asia chief executive officer, Schroders Wealth Management
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