Press Release 2015

Malaysian business families want better knowledge of wealth management and wealth distribution

New report highlights the importance of asset allocation, wealth planning and protection strategies to the growth of Southeast Asian business families

Kuala Lumpur, 11 December 2015 - A new report by United Overseas Bank (UOB) Singapore Ltd and the Singapore Management University's Business Families Institute (BFI@SMU) revealed that Malaysian business families want better knowledge of wealth management and wealth distribution.

The report titled Riding on Asia's economic transformation - Growth strategies of Asian business families found that only eight per cent of Malaysian business families believe they have sound wealth management knowledge. However, this is still slightly ahead of Singapore and Thailand where four and six per cent of respondents shared the same belief, respectively.

Mr Kan Wing Yin, Head of Commercial Banking, UOB Malaysia, said, "The study shows that Malaysian business families recognise how wealth management can preserve and protect their businesses as they grow in size and scale. They see how a good grasp of understanding how to manage their wealth helps to ensure that the value of their business and personal wealth is not lost during the transition from one generation to the next. As a result, Malaysian business families are demanding deeper understanding of key areas within wealth management, including asset allocation, wealth planning, wealth distribution, family governance and succession planning."

Malaysian business families are also responding to the more volatile global economy in their asset allocation and risk tolerance. When it comes to taking risks on high return investments, Malaysian business families were found to have the highest risk appetite as compared with other Asian business families surveyed. Of Malaysia's respondents, 58 per cent favour high risk and high return investments. Singaporean business families however were found to be the most risk-averse in Asia with only 29 per cent of respondents using high risk investments as a growth strategy.

Lack of talent recruitment and development is primary challenge to future growth

The survey also showed that one in three Malaysian business families views talent recruitment and development as the main challenge to securing long-term sustainability of their companies. Malaysian business families are countering this challenge by hiring professional managers from outside their families.

Mr Kan said, "Many Malaysian business families are at various stages of preparing for the next generation to succeed them and they recognise the need to seek professional help to ensure that their business remains competitive."

"These professionals hold the specialist skills that business families require for a more resilient and sustainable business in these uncertain times. They also help to nurture the next generation of family members through knowledge transfer, coaching and mentoring."

The report also found that more than 80 per cent of Malaysian business families place great emphasis on values such as commitment, integrity and trust which they have observed in their own families and which they believe underpin the long-term financial and strategic decisions made by their leaders. They therefore expect that professional managers working with them uphold a similar set of values.

Conducted by BFI@SMU between November 2014 and July 2015, the research report shares insights into how Asian family businesses perceive, build and grow entrepreneurship in family businesses. It also offers a comparative analysis of entrepreneurial activities as well as succession planning involving professional managers in Asian business families across different countries. A total of 192 respondents from seven Asian countries, namely, China, Indonesia, Malaysia, Myanmar, Philippines, Singapore and Thailand participated in the survey