Indonesian Family Businesses Face Wealth Transfer Challenges

Legacy Planning Remains Limited

Indonesia is experiencing a growing phenomenon of intergenerational wealth transfer among business families. However, a recent study by Sun Life Asia highlights significant challenges in maintaining family wealth and values across generations. The study reveals that only 38% of financially established families in Indonesia have actually used available legacy planning instruments.

Financial Priorities and Family Expectations

The research shows that 70% of wealthy Indonesian families prioritize financial stability, while 56% hope their legacy will support the education of future generations. This indicates a strong desire to create lasting family impact beyond immediate financial security.

Challenges in Business Succession

Albertus Wiroyo, President Director of Sun Life Indonesia, emphasized that the challenge is particularly significant for families running businesses. Without comprehensive succession planning, family businesses that have taken decades to build can face operational disruptions, internal conflicts, and even loss of value during leadership transitions.

Expert Insights

"We see many successful Indonesian families who have built substantial businesses and wealth but lack a comprehensive strategy to ensure economic continuity across generations," Wiroyo stated. This lack of planning can lead to significant risks for family enterprises that are crucial to Indonesia's economic landscape.