We are not spoilt: Asia’s next generation of rich

Survey shows majority of Asia’s next generation of business leaders spend most of their time working.

To gain insights into the needs of Asia’s next generation of business leaders or the “Next Gen”, Barclays Wealth recently commissioned its latest report titled Project Next Gen: Understanding the Next Generation of Leaders of Family Businesses in Asia, to better understand how the financial industry can better serve this growing class of individuals.

One of the key motivations cited by the Next Gen was that of being able to ensure their assets are protected for the sake of their personal financial security as well as that of the family. Fifty-eight per cent of respondents felt constant attention is required to prevent their wealth from decreasing. More than half of them also felt that family wealth is better left intact while each generation makes its own wealth to add to it.

More than half of respondents (52 per cent) were aware that their families had set up asset ownership structures to ensure that the family wealth and business continue to be managed for the benefit of the family for generations to come.

One of the findings of the report revealed that the majority of Next Gen members were already working for their family business. When asked what their main motivations for doing the current work are, 87 per cent of respondents indicated that it was due to personal passion and 80 percent said that it was because they were proud of the work that they do. This shows that the Next Gen have a strong belief in the model of their family businesses and want to be able to further develop the business for the future.

Meanwhile a significant 80 per cent said they wanted to be able to do something on their own, and over half of the respondents cited how they would like to prove their worth within the family business and build upon their family’s achievements. Many feel that their family businesses still had a lot of potential and the majority of respondents (83 per cent) did not feel that family businesses tend to get outmoded.

Even though they work in their family businesses, most of the Next Gen are currently not involved in the financial decisions of the family businesses. However, there is a growing trend of those who would like to be involved in these decisions. One of the reasons raised was that they want to have a greater understanding of their family business’ finances to better run the company. Over 47 per cent of respondents said that they were working within their family business to gain experience which would help them one day run it, revealing that many had aspirations to take over from their parents. However, many felt that they would like to go one step further with more than half of respondents feeling that each generation should make its own mark (56 per cent).

Contrary to usual beliefs that the rich second generation are spoilt and extravagant, the report reveals many of these Next Gen respondents spent a significant amount of their time working or on work-related activities (83 per cent). This activity was followed by respondents spending a significant amount of time with their family (50 per cent).

Additionally, the majority of the Next Gen also have a deep sense of appreciation of the family wealth that they have. Seventy-five per cent of respondents felt that the older generation has played an active part in grooming the younger generation for future responsibilities and 67 per cent of respondents also felt that the older generation takes an active interest in the future aspirations of the younger generation.

When asked for the main reasons for using financial advisors, the Next Gen highlighted the top three reasons being the access to investment ideas and increasing their wealth (63 per cent respectively), as well as to expand their business (40 per cent). Nevertheless, over 70 per cent turned to their parents and relatives for advice showing that trust and family relations still play a significant role in understanding financial decision making.

The research covered six markets across Asia – China, Hong Kong, India, Indonesia, Singapore and Taiwan.