High net worth individuals (HNWI) are at risk of failing to secure a lasting legacy that reflects their values in the ‘Great Wealth Transfer’, HSBC Private Bank has warned.

The private bank noted that more than $100trn of global wealth is expected to pass between generations over the next couple of decades.

Its Enduring values: Building a lasting legacy report outlined how those who did not set out a clear plan for their legacy risked family conflict, missed opportunities, and the potential erosion of their wealth as the Great Wealth Transfer unfolds.

The report warned it was not just HNWIs’ financial assets that could be lost over time, but also their non-financial wealth.

HSBC Private Bank’s survey found that 72 per cent of wealthy individuals felt their legacy was more defined by their passing on of their values than their financial inheritance.

It indicated there was no single route for how HNWIs wanted to spend or pass on their wealth, with 35 per cent preferring to enjoy it with their family rather than pass it on after their death.

More than a quarter (28 per cent) wanted to pass it on while still alive, and 23 per cent planned to do so after their death.

The report argued HNWIs that set out a wealth philosophy with a clear set of intentions for their wealth, had early and open communications with their families, and unified behind a cause that all family members can support would be best equipped to create a lasting legacy.

“Many wealth creators are so busy building their fortunes that they have under-invested in preparing the next generation,” commented HSBC Private Bank head of family governance, family office advisory, and philanthropy, Russell Prior.

“What they need is a clear, well-developed wealth philosophy, involving a much wider set of considerations, than just setting out plans for their financial assets.”

HSBC Private Bank head of wealth planning and advisory, Asia Pacific, Ann Ling, added: “Wealth brings freedoms and a lot of convenience, but to achieve a lasting legacy, families need open communication about what they are passionate about and can unify around.

“From my experience, I've never seen people complain about having the family discussion too early.”

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