Wealthy Families Delay Succession Plans as Founders Refuse to Let Go

While a significant portion of wealthy families aspires for their wealth to endure for at least two generations, a DBS report indicates that founders' reluctance to cede control is a primary factor delaying succession planning. This challenge is compounded by a notable gap in preparing the next generation, with nearly half of families not involving them in the planning process, and only a minimal fraction allowing them to lead. This suggests a disconnect between long-term aspirations and current preparatory actions.

Beyond founder reluctance, the report highlights significant structural hurdles to wealth transfer. Over half of families hold key assets in personal names or through personal investment companies, which can complicate intergenerational transfers. In contrast, only 20% use professionally administered trusts, a legal arrangement where assets are held by one party for the benefit of another, often optimizing for succession and tax planning. This low adoption, coupled with 55% being unsure about suitable ownership structures, suggests a broader lack of preparedness.

These structural issues are part of wider operational gaps, including a lack of formal business continuity plans in over 85% of family offices and unaddressed cybersecurity risks for 38% of respondents. Similarly, AI adoption remains limited; while 60% want to learn how to use AI effectively, 47% have not yet integrated digital tools or AI analytics into their operations. Barriers to wider AI use include a lack of internal expertise and data security concerns.