This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on Dec 21 - 27, 2015.

MALAYSIAN business families have the highest risk appetite on investments compared with other Asian business families surveyed, according to a report by United Overseas Bank (UOB) Singapore Ltd and Singapore Management University’s Business Families Institute. 

“When it comes to taking risks on high return investments, 58% of Malaysian respondents favour high-risk, high-return investments. Singaporean business families, however, were found to be the most risk-averse in Asia, with only 29% of respondents using high-risk investments as a growth strategy.”

According to UOB’s Dec 11 press release, the report titled Riding on Asia’s Economic Transformation — Growth Strategies of Asian Business Families finds that Malaysian business families are responding to the more volatile global economy with their asset allocation and risk tolerance. 

According to Kan Wing Yin, head of commercial banking at UOB Malaysia, Malaysian business families are also demanding deeper understanding of key areas within wealth management, including asset allocation, wealth planning, wealth distribution, family governance and succession planning. 

“The study shows that Malaysian business families recognise how wealth management can preserve and protect their businesses as they grow in size and scale,” he says. “They see how a good grasp of wealth management helps to ensure that the value of their business and personal wealth is not lost during the transition from one generation to the next.”

Across Southeast Asia, the top challenges faced by growing business families are talent recruitment and development (49%), lack of professional wealth management (26%), lack of plans for future development (26%), establishment of modern management systems (26%), lack of a succession plan (26%), generation gap (26%), relationship between family members and professional managers (18%) and limited influence of brand (3%).  

The report says only 8% of Malaysian business families believe they have sound wealth management and distribution knowledge. By comparison, only 4% and 6% of Singaporean and Thai business families respectively believe that.

The survey was conducted by Singapore Management University’s Business Families Institute between November 2014 and July 2015. A total of 192 respondents from seven Asian countries — China, Indonesia, Malaysia, Myanmar, the Philippines, Singapore and Thailand — participated in the survey. 

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