Sun Life finds 78% of respondents say younger generations are willing to take over.

Insurers and financial advisers need to focus more on succession planning and preparing the next generation to take over, as most family businesses in Asia lack a fully developed succession plan despite 78% of respondents saying the next generation is willing to take over.

Only 26% of family-business respondents have a fully developed succession plan, highlighting the gap between willingness to inherit a business and readiness to run it, according to research by Sun Life Asia.

The research also found that two-thirds of respondents believe dividing wealth fairly does not always mean dividing it equally, reflecting the challenges families face when allocating assets amongst members with different contributions and responsibilities.

Contribution to the family or business and caregiving responsibilities account for 18% of the factors considered when dividing wealth, followed by financial need at 16% and wider family circumstances at 14%.

David Broom, chief client and distribution officer at Sun Life Asia, said families should discuss their expectations early and agree on clear principles for wealth distribution.

Next generation faces preparation gaps

Amongst families whose next generation is not fully willing to take over, the proportion citing a lack of preparation or experience rose from 28% in 2025 to 39% in 2026.

Meanwhile, the proportion citing a lack of interest fell from 43% to 34%, whilst those preferring to sell the business or cash out dropped from 22% to 12%.

Digital innovation is also becoming a concern. Nearly a quarter (23%) of respondents whose next generation is not fully willing to take over cited a lack of digital innovation as a reason, more than double the 10% recorded in 2025.

Broom said families need to give future leaders the experience and financial knowledge to make informed decisions, whilst ensuring the business is prepared for the next generation.

More families seek professional advice

The research found that 56% of family-business respondents had sought professional advice for legacy planning, up from around half in 2025. Half also believe financial advisers should take the lead in the process.

More families are involving younger members in financial decisions. Some 37% have included, or plan to include, younger family members in financial or investment decisions, whilst 32% have encouraged, or plan to encourage, them to engage with advisers.

Hong Kong and Singapore differ in succession planning

Family businesses in Hong Kong and Singapore face similar challenges in preparing successors, with 38% of respondents in both markets whose next generation is not fully willing to take over citing a lack of preparation or experience.

However, Hong Kong respondents reported greater progress in succession planning. A third have a fully developed succession plan, compared with 18% in Singapore.

Nearly three-quarters (73%) of Hong Kong respondents have sought professional advice, compared with 50% in Singapore.

In addition, 41% in Hong Kong have fully communicated their legacy plans to their heirs, against 25% in Singapore.

Singapore respondents placed greater emphasis on financial education, with 41% teaching or planning to teach younger family members financial basics, compared with 28% in Hong Kong.

They were also more likely to believe financial advisers should play a role in legacy planning, at 89% compared with 73% in Hong Kong.

Legal and tax issues pose another challenge in Singapore, where 43% of respondents cited legal or tax complexity as a barrier to legacy planning, compared with 25% in Hong Kong.

A further 37% of Singapore respondents said they would like to seek professional guidance in the future.

The findings highlight the need for family businesses to prepare successors, establish clear principles for wealth distribution and seek professional advice before handing over control.