Most Indian Wealthy Families Lack Formal Succession Plans, Study Finds

Just over one-third of Indian family enterprises and wealth custodians possess a clear, documented succession plan, according to a report published October 13 by Grant Thornton Bharat and Entrust Family Office. An additional 42% have a broad agreement on succession but have not yet formalized their plans. The study also revealed that 16% of families are currently discussing succession without clarity, while a mere 6% do not consider it a priority, indicating a widespread gap in formalizing future wealth transfer strategies.

Succession planning involves preparing for the transfer of leadership, ownership, and management of a family business across generations to ensure continuity and prosperity. The joint study gathered perspectives from family business leaders and wealth holders across various generations, representing families with wealth ranging from approximately ₹100 crore to ₹10,000 crore.

Preserving family wealth remains the top priority for 78% of surveyed custodians, who focus on protecting family wealth, values, and continuity. However, their focus is expanding, with 46% prioritizing income growth and diversification beyond their primary business, and 38% aiming to build a legacy beyond financial returns. Institutionalizing family offices and exploring global exposure are also gaining importance, each prioritized by 30% of respondents. Generational differences show that first-generation respondents primarily focus on preservation, while third-generation families integrate legacy protection with new growth avenues.

Families generally favor measured risk, preferring long-term strategic or thematic investments for stability and predictability. Around 56% of respondents selected long-term capital appreciation and compounding, while 21% prioritized exposure to innovation and emerging sectors. The involvement of the next generation varies: 36% of first-generation families report meaningful influence or co-leadership from the next generation, a figure that drops to 18% among second-generation families before rising to 54% in third-generation families. This suggests tighter control during second-generation transitions. Pallavi Joshi Bakhru, Partner and Family Office Leader at Grant Thornton Bharat, noted that the next generation inherits both wealth and responsibility. Looking ahead, 46% of third-generation leaders expect to actively run and scale the business in four to five years, while 46% of second-generation leaders anticipate moving into strategic or board-level roles.

What to watch: How families adapt to formalize plans and involve next generations in wealth management.

Editor's note: The report effectively synthesizes the survey findings and maintains the context of the study's scope and demographic focus.