78% prioritise wealth preservation, but only 36% plan succession: Report | Personal Finance

The findings highlight a gap between families agreeing on succession in principle and putting a written roadmap in place to guide the transfer of ownership, leadership and decision-making across generations. Another 16 per cent of families are still discussing succession without a clear direction, while 6 per cent said it was not currently a priority.

The report, Custodians of Change: Next Generation of Indian Wealth, released on October 28, is based on conversations with family business leaders and wealth custodians across generations. It covers families with wealth ranging from around Rs 100 crore to Rs 10,000 crore. The authors caution that the findings are illustrative and are not based on a statistically validated survey.

Succession remains unfinished business

Succession planning involves more than deciding who will inherit a family’s wealth. It also requires clarity on who will run the business, how major decisions will be made, how ownership will be divided and how disagreements will be resolved.

The report suggests that many families have started these conversations but have not translated their understanding into formal arrangements.

“Successful succession begins long before leadership or ownership changes hands,” said Pallavi Joshi Bakhru, partner and family office leader at Grant Thornton Bharat.

It requires families to prepare the next generation, clarify ownership and responsibilities, and establish a framework that supports continuity, she said.

The report also finds that age and wealth influence how families approach succession. Leaders aged over 50 are more likely to have formalised their plans, while those in their 40s are more likely to be building consensus before committing their decisions to paper. Informal arrangements become less common among families at the highest wealth levels.

Next generation’s role changes across generations

The report challenges the assumption that younger generations gradually become less involved in running family businesses as wealth passes down.

Among first-generation families, 36 per cent said the next generation already had meaningful influence over decisions or co-led specific areas of the business. The proportion fell to 18 per cent among second-generation families before rising to 54 per cent among third-generation families.

The share of families where the next generation was not involved in decision-making was 18 per cent among first-generation families, rose to 36 per cent among second-generation families and dropped to 8 per cent among third-generation families.

This suggests that families may exercise tighter control during the second-generation transition before giving younger members greater responsibility in the third generation.

Their expectations for the future also differ. Second-generation leaders are more inclined to move towards strategic or board-level roles, while third-generation leaders show a stronger preference for actively running and expanding businesses.

For families, therefore, succession is not simply about identifying an heir. It is about preparing successors to manage businesses and wealth, while ensuring that the transition does not disrupt operations.

Wealth preservation remains the top priority

Preserving family wealth, values and continuity remains the leading long-term priority, cited by 78 per cent of respondents. However, families are also looking beyond their existing businesses to build additional sources of income.

Nearly half, or 46 per cent, want to grow or diversify income beyond their primary business. Another 38 per cent prioritise building a legacy that extends beyond financial returns, while 30 per cent want to institutionalise their family office and a similar proportion seek greater global exposure and cross-border opportunities.

The investment approach also reflects a preference for long-term wealth creation. Capital appreciation and compounding were the most important investment outcomes for 56 per cent of respondents, while 21 per cent prioritised exposure to innovation, emerging sectors and new-economy themes.

The report also highlights differences based on wealth. When asked how they would invest $1 billion for the long term without family or legacy obligations, half of the families managing more than Rs 5,000 crore said they would prioritise direct business acquisitions. Across other wealth groups, public markets remained the preferred starting point.

Professional management gains ground

Decision-making within family enterprises is also becoming more structured. The most common approach involves family members working jointly with professional management, although some families continue to leave the final decision to the head of the family.

Governance preferences vary by generation. Founders generally favour family-led structures supported by external advisers. Second-generation leaders show a stronger preference for professional management under family oversight, while third-generation families increasingly favour a hybrid model.

Family offices are also evolving beyond investment management. The report identifies professionalising investment processes, diversifying portfolios across asset classes and geographies, and strengthening governance as important priorities.

“India has demonstrated its ability to create wealth. The greater challenge now is to preserve it, give it purpose and pass it forward responsibly,” said Sreepriya NS, co-founder and chief executive officer of Entrust Family Office.

Reaching an understanding on succession is only the first step. Documenting responsibilities, decision-making arrangements and leadership transitions can help turn that understanding into a plan that remains workable when the family and its business change.