Harnessing almost 90 years of experience in navigating intergenerational wealth transfer
Lee Kim Siang
HIS is the generation of the “Great Wealth Transfer”.
It is anticipated that there will be a large-scale transfer of private wealth from the post-World War II generation, or often referred as Baby Boomers, to younger generations.
The successors are poised to inherit about US$90 trillion of assets in the coming decades.
Specifically, in Asia alone, some 70,000 high-net-worth individuals are set to transfer US$2.5 trillion of generational wealth by the turn of the decade, according to a Knight Frank report. Real wealth will be concentrated in the North Asia region, including Hong Kong, mainland China, and Taiwan.
Chew Mun Yew, managing director and head of UOB Private Bank, shares his perspective on succession planning in the changing landscape of family wealth management and how UOB Private Bank leverages its strengths to help high-net-worth families achieve generational success.
Q: Why has succession planning become more relevant and important now more than ever before?
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A: We are entering the biggest intergenerational transfer of wealth in history. This shift requires careful planning to preserve and manage assets effectively, ensuring the continuity, growth and preservation of the family’s wealth and legacy.
Succession is a common and pressing concern for wealthy families, yet they often do not take proactive steps to address it. For many, the focus is still on wealth accumulation and asset preservation. It is not surprising that more than half of high-net-worth families in Asia do not have a robust plan in place.
Q: What unique challenges do high-net-worth families face?
A: The transfer of wealth from one generation to the next is crucial but it can be complex, and at times sensitive, especially in Asia where family harmony and filial piety take precedence. Some see it as a taboo to broach the topic of succession planning, given it is associated with the subject of mortality. There is often a reluctance to address these topics head-on, causing them often being left for another day.
Another challenge is the generational gap in perspectives and values. The older generation often prioritises preserving the family legacy and traditional wealth management, while the younger generation favours innovation and new strategies. Balancing these differing viewpoints requires careful mediation and a thoughtful approach to succession planning.
Q: How can these complexities be effectively navigated?
A: It is crucial to engage in open, respectful dialogue facilitated by trusted wealth managers who understand both the cultural context and technical aspects of succession planning.
With nearly 90 years of experience and an extensive footprint across Asean, we are well-placed to understand the nuances, and to simplify the complexities of intergenerational wealth transfer.
We know just how emotional and uncertain family succession can be. That’s why we prioritise building trust – earning a seat at the table and becoming a trusted partner in the vital conversations that take place between generations as they explore their own succession.
Q: In what ways has the evolving landscape impacted the approach to succession planning today?
A: In the everchanging world of business, it is essential to develop and future-proof the next generation of business leaders. They need the skills and vision to navigate evolving challenges and opportunities, ensuring that they can effectively manage and grow the wealth and family business they stand to inherit.
This new landscape also requires a more nuanced approach. The wealth manager should consider the needs and ambitions of both the immediate heirs and future generations, creating legacy and succession plans that remain adaptable to future changes while ensuring sustained success.
UOB Private Bank was recently named as Asia’s and Singapore’s best Private Bank for Next-Gen at the Euromoney Private Banking Awards 2024. Our immersive next gen programme offers a rich curriculum designed to equip the future leaders with relevant management capabilities, technical skillset, and networking opportunities. It focuses on entrepreneurship, digital innovation and technology – elements crucial to the sustainability and longevity of family businesses.
Q: Putting together a succession plan is not a one-time affair. How do Private Banks approach this, and how do you see UOB Private Bank doing this differently?
A: Private banks tailor succession plans to ensure seamless wealth transfer, leadership continuity and legacy preservation, leveraging trusts, governance frameworks and expert advisory services to ensure long-term stability.
At UOB Private Bank, we take on a journey of great foresight in succession planning together with our clients.
As a financial institution owned and managed by the third-generation, we know first-hand what it takes for wealth to endure across generations.
That enterprising spirit and shared experience have enabled us to deeply understand our clients’ needs, aspirations and challenges from a business owner’s perspective and offer insights and solutions that are sound and relevant for them.
Leveraging extensive regional networks from our Asean franchise, we also provide the connectivity and opportunities to maximise the potential of our clients’ portfolios.
We harness vast resources and deep capabilities across business segments within the UOB group, drawing upon the wealth of expertise, experience and synergies to support Asian high-net-worth families.
With our home based in Singapore, the nation’s stability and security is also ours. This gives our clients a combined comfort and peace of mind, where they can trust us to safeguard their well-earned assets and future.
Because of our history, our experience, our focus and our roots, nobody understands the values and heart of Asean better than we do.
The importance of succession planning and starting it early cannot be overstated.
Rarely is succession smooth but here at UOB Private Bank, our goal, like yours, is to always see beyond the now to the long term. We will be right by you to help generations progress, together. And to help grow, preserve and transfer wealth for the long-term.
Disclaimer: The material contained in this publication is intended for information only and does not constitute recommendation or advice as it does not take into account personal objectives, specific goals or financial situation. UOB does not accept any responsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in this publication which may be subject to change due to dynamic market conditions.
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