Jersey Finance's latest white paper and survey reveal that Asia’s wealth management community is not yet ready to adapt its products, solutions and services to the needs and expectations of the younger ultra-high-net-worth generation.
The report, Asia’s Great Wealth Transfer - Implications for the Wealth Management Community, in cooperation with financial publisher Hubbis, found that perceptions about wealth management in many countries in Asia are that they need to prepare better for the vast transfer of wealth due to take place within the region.
Jersey Finance CEO Joe Moynihan (pictured) commented: “Only 4% of respondents said the industry is genuinely ready for this development, while 37% believe the industry is poorly prepared.
“That said, there is broad-based optimism – 61% of those surveyed indicated that their family clients are working towards being better organised.
"Seven out of 10 stated that private clients in Asia are more willing than in the past to engage with the concept and practice of professionalising their legacy and succession planning.”
Key findings
According to the survey, 86% of respondents said wealth preservation and the maintenance of family harmony (including peace of mind) are the key objectives for wealthy families in organising more structured legacy and succession planning.
There are, however, many impediments to effective legacy planning, and in Asia, the most daunting prospects are encouraging the founder generation to share information and gradually relinquish control.
Connected to these issues are poor communication among family members and across generations, as well as a perceived unwillingness for some founders to pay for professional advice – 77% of respondents indicated that less than half of their Asian private clients have properly organised succession planning in place.
Younger generations have a major task in coaxing the founder generation to grasp a multi-generational approach – 73% of respondents believe the most effective outcomes for wealth management are achieved when generations work together.
Governance focus
The respondents stated that only 13% of the clients they work with or know of have got to grips with family and business governance, while 87% said progress in these areas is modest/poor.
Governance is high on the list of priorities for many of the world’s wealthy families and investors, but is perceived to be less ingrained in Asia.
The findings suggest that incumbent banks and independent asset management firms need to urgently boost engagement with Asia’s next generation clients – 43% are unlikely to stay loyal to the banks and firms favoured by the founder generation.
Moynihan continued: “Progress is certainly being made, but there is still a huge amount to be done. It is up to the private banks, independent wealth management firms and indeed wealth jurisdictions around the globe to embrace this dramatic shift in Asia’s wealth.”
• The full report can be viewed here