There is a significant business opportunity in China for financial services providers, as only half of wealth managers that target high net worth (HNW) investors in China offer inheritance planning services, says leading data and analytics company GlobalData.
China is home to a substantial entrepreneur community, 71% of whom are 51 years old or above.
This means a large number of Chinese business owners will need to find successors over the next few years. This challenge is further exacerbated by the country’s one child policy, which was only relaxed at the end of 2013, leaving patriarchs with a smaller pool of family members to choose from.
Heike van den Hoevel, Senior Wealth Management Analyst at GlobalData says: “First and foremost, the lack of a detailed succession plan puts the continuity of the entire business at risk, meaning any business owner must give serious thought to the issue. The situation also represents a missed opportunity for wealth managers to build ties with the next generation early on, which is important given the propensity for individuals to change advisors at the time of inheritance.
“In addition to the 106,500 business owners who have already hit retirement age, GlobalData estimates that another 219,500 will retire within the next 10 years. If providers fail to ensure the continuation of the relationship with successors, this will amount to a significant chunk of their current business being lost.”
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