Family Business Dilemma: When Heirs Cannot Take the Reins
A new Julius Baer and EY study reveals that 82.2% of wealthy families may sell their businesses due to a lack of prepared heirs, prioritizing family unity over legacy.
Building a thriving business over decades is a monumental achievement, but what happens when the next generation is unwilling or unprepared to take the reins? A new international study by Swiss wealth management group Julius Baer and EY reveals that the biggest challenge for ultra-high-net-worth families is not necessarily generating wealth, but deciding the future of the family enterprise.
The Succession Dilemma
Published this week and based on responses from over 700 professionals advising families with at least 50 million Swiss francs, the study highlights that generational transfer involves significant non-financial hurdles. Surprisingly, 82.2% of advisors pointed to the lack of a suitable family member to take over as a primary driver for selling the business, compared to 67.6% who cited attractive market pricing or timing.
Furthermore, readiness among heirs remains a pressing concern. Among families not yet prepared for transition, only 22.6% of advisors believe heirs currently possess the required skills. Meanwhile, 65.9% think the next generation can achieve readiness later, and 11.6% report outright disinterest from potential successors.
Preserving Family Unity
More than three-quarters of advisors believe families might consider selling the business simply to preserve family harmony and prevent internal conflicts.
Emotional attachment to the enterprise was cited by 60.6% of advisors as a major source of friction, overshadowing tax considerations and valuation disputes. Ultimately, managing post-sale wealth requires a brand-new financial strategy and a unified vision for the future.
