21% of Singapore's wealthy don't trust their kids not to blow the inheritance

Amazingly, the rest trust their kids not to blow the family fortune.

The wealthy in Singapore have one of the highest levels of trust in the next generation, according to the latest report in the Barclays Wealth Insights series. Seventy nine per cent of Singaporean high net worth individuals say that they trust the next generation to protect their inheritance, compared with the global average of 65%. In line with this, 64% of Singaporean HNWIs say that succession planning is a key financial priority.

The report, The Transfer of Trust: Wealth and Succession in a Changing Worlday, is based on a global survey of more than 2,000 HNWIs, including 500 respondents from Asia Pacific, (100 of whom are from Singapore).

Among the HNWIs surveyed, Singaporean respondents have the highest aspirations for their children in Asia Pacific, with 91% wanting their children to surpass them in their financial success and 98% saying they want to be able to provide for their children’s future education.

More than half of local respondents (53%) believe that a significant level of professional advice is needed when deciding on an inheritance plan for their children and stepchildren. This could be explained by the fact that the same proportion (53%) have experienced family conflict relating to family wealth, and 36% say that inheritance has placed an unnecessary burden on the next generation.

Thelma Kwan, Head of Wealth Advisory, Asia Pacific, Barclays Wealth commented: “This report reveals that there is a demand amongst the wealthy in Singapore to seek professional advice when approaching the issue of succession planning. Whilst HNWIs trust the next generation to manage their wealth,professional advice can play a part in helping them to fine-tune their strategies. This is particularly relevant when dealing with issues related to the intergenerational transfer of wealth.”

The global economy has yet to fully recover from the effects of the 2008 financial crisis and uncertainty continues to dominate. Economic turbulence (56%) is ranked as the biggest challenge facing the next generation globally, buts weighs especially heavily on the minds of HNWIs in Singapore, with the largest percentage of respondents (alongside the UAE at 72%) believing that economic turbulence, inflationary pressure and rising tax issues will be the main challenge faced by their children.

Despite this, Singaporean HNWIs remain the most optimistic of all global respondents about the future of their local economy, with only six per cent of respondents saying they expect the country to experience a decrease in productivity. This may be attributed to the continued initiatives by the government to stimulate the economy and establish confidence in Singapore.