- 30 Nov, 2024
- Press Releases
Succession and Estate Planning are Growing Priorities among HNW Individuals and Families in Asia, the Middle East and India, and Europe
-- Over half of respondents’ clients are aware of life insurance as tool for succession planning, yet more needs to be done to fit it into an overall plan
Transamerica Life Bermuda today announced the launch of its latest HNW research study, ‘Succession and Estate Planning Survey 2024’. The survey was undertaken by TLB, a leading life insurer specialised in underwriting large sums assured for HNW individuals, and Hubbis, a platform for wealth management professionals in Asia, the Middle East and Europe. It includes respondents from private banking, family offices, insurance brokers, and advisory firms, as well as independent wealth planners mainly in Southeast Asia, North Asia, the Middle East and India, and Europe.
Jeremy Young, Chief Commercial Officer, Transamerica Life Bermuda, said: “The overriding priority of safeguarding generations of wealth is Transamerica Life Bermuda’s purpose, with planning a critical part of the process. As HNW and ultra HNW individuals have put more attention on both wealth transfer and preserving their legacies, life insurance has become a reliable tool for flexible legacy distribution in intricate estate scenarios, especially amidst evolving global regulations and tax implications. The findings in this survey demonstrate how HNW succession and estate planning can vary between regions, and establish clear priorities for wealth management professionals to work more closely with their clients in this increasingly important area.”
Key findings from the 2024 survey on succession and estate planning include: Awareness and consideration:
- 86% of respondents found awareness and consideration around succession and estate planning has increased among their HNW clients’ following the Covid-19 pandemic, with 62% wanting to act immediately or within five years. However, of those clients who haven’t already taken action, 61% are either too busy with other priorities or see the process as too complex.
- Concern over not having plans: Over a quarter of respondents’ clients in North Asia, the Middle East and India, and Europe ranked failure to establish succession and estate planning leading to family disputes as their top concern; this proportion rose to 41% among respondents in Southeast Asia.
- Triggers for action: Among six options, 32% of respondents across all surveyed regions said health issues within the family was the top trigger for their HNW clients to establish or review their succession and estate plans. Among HNW clients in the Middle East and India, apart from health issues within the family (34%), the recommendation of advisors (33%) was another major trigger for putting plans in place.
- Key objectives: Ensuring smooth asset transfer (34%) and asset protection (32%) were the top objectives for HNW clients across all regions, while minimising taxes and legal fees was also an important objective in North Asia and Europe.
- Life insurance as a tool: Only 14% of respondents expressed clients’ interest in prioritising life insurance despite over being aware of it as a tool for succession planning. The gap suggests an underestimation of its value in estate planning and an opportunity for financial advisors to highlight its benefits – for example, in providing liquidity to cover estate taxes, debts and other expenses;
- minimising the likelihood that heirs will inherit heavy financial obligations; and helping with tax deferral and estate equalisation. Commonly used tools: Respondents noted that trusts/foundations and wills are the most commonly used tools in succession and estate planning among their HNW clients. However, HNW clients in Southeast Asia rely primarily on joint accounts with 31% of respondents ranking this first.
- Sources of advice: Generally, lawyers are the main source of advice in succession and estate planning. In Southeast Asia, and the Middle East and India, fiduciary service providers such as trust companies are almost equally preferred.
- Navigating personal and business plans: A majority (47%) of HNW clients across all regions segregate succession and estate planning for their business assets from personal assets and estate plans. This trend in Southeast Asia is particularly strong at 59%.
This survey highlights the increasing awareness and demand for succession and estate planning on the back of dynamic global events in the past few years. It provides valuable insights into the common and distinct factors among different regions, identifying opportunities and areas of focus for financial advisors. The findings underscore the need for flexible and innovative solutions, as well as the importance of regular reviews to ensure effective planning. The full report can be accessed here: Succession and Estate Planning Survey - Delivering Client Solutions 2024.
To help financial advisers better engage their clients with life insurance advisory and solutions addressing to different wealth management needs, Transamerica Life Bermuda, also in collaboration with Hubbis, released the 2024 edition of the "Guide to HNW Life Insurance – a Practical Handbook for Financial Advisors" in May. The full guide can be read here: "Guide to HNW Life Insurance – a Practical Handbook for Financial Advisors (2024)"