What Two Decades in Banking Taught Me About Family Succession

The families I saw lose the most were rarely let down by their investments. They were let down by the questions nobody was responsible for, and succession is where those questions come due.

By Percy Chan, Co-Founder & Chief Investment Officer, Prosper Family Office 全盛家族辦公室

What a banking career showed me

I joined HSBC Investment Bank (Asia) in 1997, and over the decades that followed held investment and wealth management positions at Citibank, Standard Chartered, Amundi Asset Management and Bank of East Asia. Before co-founding Prosper Family Office, I sat across the table from many families: some at the moment their wealth was made, some at the moment it changed hands, and a few at the moment it was lost.

The families I saw run into serious difficulty were rarely in difficulty for the reason anyone expected. They were in difficulty because of things no bank statement shows: an ownership structure nobody had reviewed since it was set up, a will that contradicted a shareholder agreement, a second generation never told what existed or why, three advisers in three jurisdictions each assuming another was responsible.

Inside a bank you see these problems clearly, and you also see, honestly, that they are not the bank's to solve. A banker's mandate covers the assets in front of him. The unanswered questions live in the spaces between mandates: between the bank and the lawyer, between the lawyer and the accountant, between the founder and the family. Everyone is competent. Nobody is responsible for the whole.

The gap most families do not see

An affluent family in Hong Kong typically already has advisers: a private banker, an accountant for the operating business, a lawyer who handled the last property purchase, perhaps a trustee from a structure set up years ago. What the family usually does not have is anyone accountable for the questions that fall between those mandates. Does the ownership structure still match the family's intentions? If something happens to the founder tomorrow, does the next generation know what exists, where, and who to call? These are coordination questions, and they are why the family office model exists.

Why I co-founded a family office

That gap is why my co-founders and I set up Prosper Family Office: to sit on the family's side of the table and coordinate the lawyers, accountants, trustees and bankers a family already relies on, so that their work stays consistent as the family changes. We have written separately about what that coordination involves day to day, in "What Does a Multi-Family Office Actually Do?" on our website. This article is about the part of it I watched go wrong most often from inside the banks: succession.

Succession is a process, not an event

The pattern I saw from inside the banks was that families treated succession as a future event, to be dealt with when it arrived. The families that came through transitions well treated it instead as a process that starts years earlier, while the founding generation is present, healthy and able to explain its reasoning. That is the short answer to when a family should start: for most families, now, not later. Documents matter, but I watched well-drafted structures fail because the people inheriting them did not understand them.

An honest word about the famous statistic is due here. Almost every article on family succession quotes the claim that 70 per cent of wealthy families lose their wealth by the second generation, and 90 per cent by the third. It does not survive scrutiny: the 70 per cent figure comes from a survey of 3,250 families published in 2003 by two consultants, using their own definition of failure, and it is often conflated with a 1987 study of about 200 manufacturing businesses in one American state that measured business survival, not family wealth. A firm that coordinates multi-generational planning for families should be careful with numbers, starting with the flattering ones.

Better-sourced research describes the real problem. Deloitte's 2026 global study on family business succession found a confidence gap: 48 per cent of respondents expressed high confidence in their current leadership, but only 37 per cent expressed the same confidence in the next generation's readiness to lead, and the obstacles cited most were human rather than technical. Campden Wealth's Asia-Pacific Family Office Report 2024, produced with BNP Paribas Wealth Management, found that among family offices without a formal succession plan, the two most common reasons given were that the next generation was considered insufficiently qualified (44 per cent) or too young (38 per cent). What is scarce is not the technical instruments, which Hong Kong's professional community understands well, but the earlier, slower work.

A practical sequence

This is the sequence we coordinate, each step useful on its own.

One: map everything. Every entity, account, property, policy and trust, in every jurisdiction, with the key documents located and the key contacts named, all on one page. Most families have never seen their own affairs consolidated, and the map itself usually surfaces early contradictions to resolve.

Two: decide how the family decides. Before choosing outcomes, agree the process: who is consulted on what, how disagreement is handled, what gets written down. Families that agree on process while relationships are good can survive disagreements about substance later.

Three: align the documents with the decisions. Only now do the instruments come in, coordinating the lawyers, accountants and trustees so that wills, trusts, shareholder agreements and insurance arrangements all say the same thing.

Four: prepare the people. Give the next generation graduated, real responsibility, such as a property to oversee or an entity to administer, years before they are needed. Knowledge transfers through responsibility, not documents.

Five: keep it current. A succession plan is a living arrangement, not a filing, and families do not stand still.

Hong Kong is building the infrastructure. Families still do their part

The policy environment has moved quickly: the dedicated FamilyOfficeHK team at InvestHK had assisted 252 family offices to establish or expand in the city between June 2021 and March 2026. None of that substitutes for the family's own work. What each family still needs is the connective layer between that infrastructure and its own circumstances: someone on the family's side of the table, coordinating the specialists, accountable for the whole picture.

The real deadline

Succession planning has no fixed deadline, which is exactly why it is postponed. The actual deadline is invisible: it is the last day the founding generation can still explain its intentions in its own words. Everything before that day is planning. Everything after it is reconstruction: slower, costlier, and without the one person who knew the answers.

The families who navigate this well are not the ones with the most complex structures. They are the ones who started early, decided together, wrote it down, and prepared their successors while there was still time to do it calmly. The succession discussions that went best happened at kitchen tables, years before they were needed. The worst happened in hospital corridors.

Frequently asked questions

When should a family start succession planning?

While the founding generation is still active, healthy and able to explain its reasoning, which for most families means now, not later. Succession is a process that starts years before the transition, not an event to be handled when it arrives. The real deadline is the last day the founding generation can still explain its intentions in its own words.

Is it true that 70 per cent of families lose their wealth by the second generation?

That claim does not survive scrutiny. The 70 per cent figure comes from a 2003 survey of 3,250 families by two consultants using their own definition of failure, and it is often conflated with a 1987 study of about 200 manufacturing businesses in one American state that measured business survival, not family wealth. The underlying problem it points to is real, but better-sourced research describes it more accurately, including Deloitte's 2026 finding that 48 per cent of respondents had high confidence in current leadership while only 37 per cent said the same of the next generation's readiness.

What can a family do on its own, before engaging anyone?

Three things. Make the map, listing every entity, account, policy, property and trust, in every jurisdiction, on one document. Start the conversation before it is urgent. And give the next generation something real to carry, because knowledge transfers through responsibility, not through documents.

Sources

Family business succession planning and the next generation, Deloitte Global, 2026; The Asia-Pacific Family Office Report 2024, Campden Wealth with BNP Paribas Wealth Management; Legislative Council reply LCQ18, HKSAR Government, 22 April 2026.

About the author. Percy Chan is Co-Founder & Chief Investment Officer of Prosper Family Office, a multi-family office based in Hong Kong. Prosper Family Office coordinates wealth structuring, trust and succession planning, family governance and next-generation education arrangements for affluent families, working with professional teams across the legal, tax, accounting and trust disciplines. Its office is located in Tsim Sha Tsui, Hong Kong.

This article reflects the author's personal observations and is provided for general information only. It does not constitute legal, tax, accounting or investment advice, and should not be relied upon as such. Families should seek advice from appropriately qualified professionals on their specific circumstances.