In today's rapidly changing world, one significant phenomenon to watch is 'The Great Wealth Transfer.' It is projected that by 2030, high-net-worth individuals (HNWIs) worldwide will transfer wealth worth $18.3 trillion (662 trillion THB). In Asia, HNWIs are expected to transfer assets valued at $2.5 trillion (90 trillion THB). Family businesses are a crucial source of wealth for HNWIs. However, the journey of transferring family businesses is rarely smooth. This has led to the introduction of the new Family Business Transformation service, providing high-net-worth clients with consultation to adjust their family businesses for a seamless transition. The bank collaborates with both domestic and leading global consulting firms to meet the unique needs and challenges of each family, reinforcing its leadership in family wealth management in Thailand. The comprehensive service ensures the preservation, growth, and sustainable transfer of family wealth, giving clients confidence that their assets will be well-maintained and successfully passed on to future generations.
Mr. Perapat Reinprayoon, Managing Director - Wealth Planning and Non-Capital Market Head of the Private Banking Group at KBank, stated, "Over the past six years, KBank Private Banking has provided family wealth management services and found that over 90% of our high-net-worth clients are business owners. Many families face challenges in succession. Studies conducted jointly by KBank Private Banking and Lombard Odier reveal that many next generations do not wish to take over the family business. They prefer independence in choosing their careers or starting their own businesses. Families must find ways to keep the family business running, such as hiring professional managers instead of relying on family members. In such cases, next generation must learn to be good shareholders. In cases where next generation want to take over, they often stipulate that the family business must be systematically managed, requiring expert advisors rather than family decision-making. Business and family structures need to be more flexible.
Moreover, studies show that without proper succession planning, only 30% of family businesses survive into the second generation, 12% into the third, and a mere 3% into the fourth. Family business fragility is not only due to generational transitions but also internal factors like poor management, lack of transparency, loose internal controls leading to fraud, visionless management, lack of skilled personnel, and inadequate succession planning and executive selection processes. Thus, planning and structuring to systematize family businesses is crucial for their continuity and smooth transfer."
The Family Business Transformation service is a new addition under the Family Wealth Planning Services by KBank Private Banking. It offers consultation for effective family business planning while maintaining good family relationships, guiding clients through the entire process, including:
Mr. Perapat concluded, "The Family Wealth Transformation service is designed with an understanding of the unique needs of each high-net-worth family. Each family has different needs and issues. KBank Private Banking collaborates with both domestic and international partners to improve and develop systems for efficient family business operations. KBank Private Banking views adaptation as essential. Family businesses that stick to traditional methods, do not adapt, and do not embrace change face higher risks and failure rates. Another critical risk is the lack of family business succession planning, which can lead to the collapse of both the family and the business. Ultimately, KBank Private Banking aims to preserve and sustain the family businesses of our clients."