“If you fail to plan, you are planning to fail.” Benjamin Franklin’s famous quote captures succinctly the notion that lack of planning will have costly consequences. It is a statement that has never been more pertinent for today’s families. 

No one could have planned for the unprecedented impact that COVID-19 would have on almost every aspect of modern life. Things are not as foreseeable as they were in the past.

This has prompted affluent Asian families to consider proper succession planning and the importance of having proper structures and strategies in place.

“Before COVID-19, many people saw succession planning as something they would deal with in a few years’ time; it wasn’t a priority.” says Sandie Cheung, Senior Director, Trust and Fiduciary Services, Asia at HSBC Global Private Banking. “But now they see the immediate need and want to take action.”

When the pandemic happened, families that were accustomed to travelling freely were suddenly unable to do so. Displaced geographically and disconnected from each other, international families were faced with unexpected scenarios that impeded the way they usually and did business. 

Families were forced to revisit their existing strategies and operating models to ensure their businesses and investments were economically viable in the new environment. 

It also brought succession planning to the forefront of people’s minds - particularly given the great wealth transfer underway in Asian by first or second generations to the next generations. This transition doesn’t simply stop when borders close, nor can it be postponed indefinitely. Cheung’s advice is simple,

In the past, when we discussed with first generation wealth creators who they wanted to benefit from the family legacy, they would choose between male heirs or expanding to everyone with the same bloodline. Now, modern families are more diverse and can include children from surrogate mothers or adopted by LGBTQ+ couples. This has prompted families to consider new dynamics and determine what matters most.

Almost instantly, most business activities and communication moved online. This forced people to become more tech literate, especially individuals who wish to avoid in-person contact with others to minimise risk of getting ill. 

While familial separation and the socio-economic impacts of the pandemic were unquestionably negative, Cheung sees a silver lining: 

The widespread adoption of video conferencing enabled virtual meetings and had the unexpected effect of speeding up decision-making and planning processes. Not only were family members saving time on travel, without other social functions and distractions, individuals had more time to plan and get work done. 

“In the past, for some larger families we would host a few consecutive days of family meetings once or twice a year, with family members and advisers flying in from around the world,” says Cheung. “Now we can break down these meetings into shorter online sessions with increased frequency, allowing more productive discussions and faster decision-making.” 

These changes were also accompanied by a shift in mindset due to the pandemic as things took on a greater urgency to first or second generation wealth creators grappling with bigger questions: What if I’m no longer around? What happens to my family and my business tomorrow?

“As more families begin to actively plan their legacy, having a third-party professional may offer new perspectives and impartial advice to ensure smoother transitions,” Cheung notes. “It never hurts to have another pair of eyes looking over things.”

What we can learn from the most successful families is to be forward-thinking and adaptable, planning ahead to respond responsibly to foreseen and unforeseen external and internal forces. If COVID-19 has taught us anything, it’s that nothing is certain, and we cannot rely on past trends as an indicator of the future. 

Instead, the focus should be on creating flexible strategies that are best positioned to accommodate shifting regulations and policy changes as well as changing investment and business outlooks. 

“Never wait until the last minute,” says Cheung. “Consider that if you’ve spent half your life building your wealth and business, you don’t want to rush and pass it on in just ten minutes.” 

Over the last year many families have felt a sense of immediacy to make succession and legacy plans. And there’s no better time than now. While people may be living longer, it’s important to make plans while the first generation still have the energy to share their perspective and pass on family values along with their wealth. 

It’s also crucial, where circumstances permit, to engage the next generations in the planning stage and listen to their views and approach. Cheung sees more families embracing transparency and open-minded mindsets by having the right conversations and getting the next generations to buy in and feel like they are part of the process.

As trusted partners for 75 years, we understand the traditions and expectations Asian families have. HSBC Trustee, as part of Global Private Banking, has served generations of international families, providing all aspects of wealth planning solutions, from tailor-made trust structuring and administration, to family office, family governance and philanthropy services. 

With the breadth and depth of our capabilities, we can support families who wish to safeguard and pass on their legacies. Our global footprint means we can connect our clients to the wider expertise around the globe to manage their global wealth needs. For more information, contact us or your Relationship Manager.