One of the top figures at Deutsche Bank has talked about how only a minority of APAC firms have a next-gen figure on its management team, which might suggest that there is a planning gap that needs to be addressed.

One out of five businesses in Asia-Pacific have a next generation member – aged 40 or younger – on its management team, while firms have to think hard about transferring control carefully as founders age, Deutsche Bank’s Asia-Pacific head of wealth Planning, Sheau-Yuen Tan, said in a recent “150 seconds on APAC” podcast by the German bank. 

The scale of the challenge in helping family-run firms steer transfer becomes clear when considering that the APAC region accounts for about 42 per cent of all global wealth (source: McKinsey & Co). 

“The majority of those transferring wealth in the next decade are currently between the ages of 65 and 84. Their primary goal in legacy planning is to ensure that their hard-earned wealth remains within the family and is used in the way they would have wanted. In contrast, the next generation’s aspirations become more global as they embrace digitalisation, and seek diversity in investments, geographical footprints, and management styles,” Tan says in the podcast.

“One out of five businesses have a next generation member (aged 40 or younger) on the management team, and we keep these generational differences in mind when we advise the family,” she continued.

“In the aftermath of the pandemic, there is an increase in concerns about social inequality and injustice. Many of today's wealthy next generation are aware of their highly privileged position. They want to use their money not only to leave a legacy, but also to lead the way in responsible investing and sustainable business practices which combine financial returns with social and environmental benefits,” she said.

“When advising families of multicultural origin in Asia, it is critical to remember that there is no one-size-fits-all solution. Incorporating ESG investments into the investment portfolio should be a step-by-step strategy, and families can begin with a small portion of their portfolio set aside for ESG investments and reflect on their priorities, what positive impact they want to see in the communities and review these strategies against longer-term financial returns,” Tan added.