Only 27% of next gen willing to lead family firms, legacy planning lags

The lack of structured succession planning leaves many businesses exposed.

Nearly a third of family businesses in Asia have a fully developed succession plan, despite most owners saying they intend to put legacy plans in place, according to Sun Life Asia.

In the recent survey by the insurer, findings point to a significant preparation gap across Asia, where family-owned firms make up 85% of companies and account for a sizeable share of the world’s largest family enterprises.

Sun Life says the lack of structured succession planning leaves many businesses exposed, especially as Asia undergoes a major intergenerational wealth transfer. 

David Broom, Chief Client & Distribution Officer at Sun Life, said it is important for owners to prepare now to safeguard their legacies.

The survey shows wide differences across markets. Vietnam has the lowest share of structured plans at 14%, whilst Indonesia has the highest at 39%. 

In Hong Kong, only 20% say they have fully developed succession plans, compared with 28% in Singapore.

Communication gaps persist. Amongst next-generation family members already involved in the business, only 44% say older generations have fully communicated legacy plans. 

This falls to 27% when the next generation is not involved. Most discussions take place during formal family meetings, followed by one-on-one conversations.

Protection remains a key factor in legacy planning. About 69% of business-owning families say ensuring their family’s financial security is the most important element of a legacy plan. 

Clear estate planning follows at 54%, and building enough wealth for future generations at 51%. 

Around 68% want the wealth they pass on to be invested for long-term growth through financial assets, life insurance or the family business.

A widening generation gap is adding pressure to succession planning. Only 40% of business owners believe the next generation is fully willing to take over. 

Amongst next-generation respondents not currently involved in the business, just 31% say they are fully willing to assume leadership. 

Many cite independence (50%), fear of responsibility (42%), lack of interest (28%) and different values (27%) as reasons for stepping away.

Fewer than half of family business owners have sought financial planning advice. 

Amongst those who have or plan to do so, 61% say expert knowledge is the top requirement when choosing a professional, followed by the ability to handle long-term family needs (52%) and a personalised approach (49%). 

In terms of how advice is delivered, 36% prefer individual subject matter experts, 23% favour a full family office model, and 32% want a mix of both.

Broom said many family businesses recognise the importance of structured planning but remain unprepared, adding that professional guidance can help prevent future conflict and support long-term succession goals.