Only 2.3% of wealthy family businesses are ready for succession. What's holding them back?

Only 2.3% of ultra-high-net-worth business-owning families are fully prepared for the sale or transfer of their companies, highlighting a succession gap that wealth, professional advisers and access to capital have failed to close.

The challenge is not confined to valuation or deal execution. Julius Baer-EY's Family Barometer Report 2026 shows that 65.9% of families believe the next generation is not yet ready, while emotional attachment, informal decision-making and weak family governance continue to complicate the transition. For India's business families, the hardest part may not be transferring ownership -- but preparing the family to decide what comes next.

Edited excerpts from a chat with Ashwin Patni, Head, Wealth Management Solutions, Julius Baer India:

Julius Baer-EY Family Barometer Report 2026 finds that only 2.3% of UHNW business-owning families are fully prepared for a sale or transfer. Why is readiness so low despite families having access to advisers, capital and professional management?

While family businesses remain the principal source of wealth for UHNW families, relatively few are fully prepared for the point at which ownership changes hands. This can be thought of as a "readiness gap". Our survey indicates that this readiness gap runs in two directions. On one side, many businesses have not completed the governance, ownership, and struc­tural preparation needed for a successful sale or transition. On the other, the next generation is often still developing the experience, confidence, and perspective required to assume the responsibilities of ownership or leadership. Preparing a family business therefore means preparing both the enterprise and the people who will shape its future.

Readiness is best understood as a continuum - one whose technical surface conceals territory far harder to quantify, from the quality of family governance to the emotional willingness to let go of something that may have defined a family for decades. The visible technical work often masks a deeper challenge: preparing the family itself to make a shared decision when the time eventually comes.

Family misalignment is identified as the biggest barrier to a successful exit. In India, what typically causes the greatest disagreement -- valuation, control, the timing of the sale or the future direction of the business?

Indian families often face the challenge of maintaining traditional values while keeping pace with a fast-changing investment and regulatory environment and the ambitions of newer generations. Among the most common failures is excessive concentration of decision making with one individual, who is typically the patriarch or a founding entrepreneur. Structures are circumvented and authority often remains informal and personality driven. This leads to loss of decision-making if that individual steps back or is suddenly unavailable. Another common weakness is the blurred boundaries between the operating business, the family office and the family itself. Capital allocation, investment decisions, personal preferences and business priorities intermingle, affecting returns and accountability. The family office gets exposed to governance, risk and succession failures.

How significant is emotional attachment to the business among Indian promoters, particularly when the company represents several generations of family identity and wealth?

Both in India and globally, emotional attachment to the business ranks as a key source of misalignment, ahead of governance or valuation disa­greements. Operational success says little about a family's readiness to make a collective decision to sell. The businesses that look most prepared on paper often conceal families who have never openly discussed what life looks like once the company is gone. The readiness paradox is that building a successful business and developing a family's human capital are two very different challenges. One creates wealth; the other ensures that wealth can endure across generations.

With the operating company no longer at the centre of family life, the familiar corporate governance structures fall away. The family suddenly has to answer a different question, how do we govern ourselves and the ownership of our wealth? Governance and family dynamics are among the areas where families frequently require support after a liquidity event.

Indian business families often have multiple heirs with varying levels of interest and capability. How should families decide whether the next generation should take over, sell the business or bring in professional management?

For many business families, the family office is becoming a bridge between generations. Earlier generations often expanded the core operating business as the primary expression of ambition and identity. Today, next-generation members may not wish to join or replicate the original enterprise and instead pursue interests in impact investments, technology, climate solutions, media, healthcare, philanthropy or other sectors. An estimated US$4 trillion wealth transfer is expected within the Indian diaspora over time. In this context, the family office can play a stabilizing role. It institutionalizes capital, separates ownership from day-to-day operations where needed and creates space for generational transition without destabilizing the core enterprise.

The report says 65.9% of families believe the next generation is not yet ready, although it may be prepared at a later stage. What does effective next-generation preparation look like beyond formal education and joining the family business?

Across India, the architecture of family wealth is evolving. In some cases, first-generation entrepreneurs are passing the baton to global, tech-native inheritors; cross-border structures are on the rise; and the investing environment is becoming both vast and complex. Yet the rules governing this evolution are often undefined and dependent on the instincts of a single individual. A useful way to understand this complexity is through the "three-circle model," which separates family (values and relationships), ownership (control and oversight) and management (execution). High-performing family offices define governance forums, decision rights and interfaces across these three circles, rather than allowing them to overlap informally. The governance framework for a family office, therefore, acts as the silent anchor, providing an essential foundation that can safeguard the family's wealth in a family office structure, enable continuity and shield against discord.

Further, for families whose wealth is anchored in a family business, succession is the question that underlies every other one. Who leads next? How is ownership shared across branches? When does the founding generation step back, and on whose terms? In the context of a potential exit, these questions become commercially consequential, shaping valuation, negotiating leverage, and the family's capacity to act when an opportunity arises. Yet the data suggests those conversations are not happening openly enough. In most families, the next generation is consulted but holds no formal vote, and less than one in five actively participates with an equal say. The gap between a family that has genuinely worked through its succession thinking and one that has merely deferred the conversation is, as this year's survey suggests, one of the clearest predictors of exit readiness.

Does India's growing family office ecosystem meaningfully improve succession readiness, or are many family offices still focused primarily on investment management rather than governance and transition planning?

Balancing intergenerational priorities and navigating increasingly sophisticated operating environments demand formalized governance frameworks. Family constitutions, investment committees, family councils and professional management teams are becoming more common as families seek to make ownership, accountability, risk oversight and succession planning clearer. Governance is, therefore, now seen not only as a mechanism to preserve wealth, but a critical component that enables continuity, decision-making and long-term sustainability across generations.

The increasing institutionalization is also creating a ripple effect in professional management, operating models, use of technology, and more. Many family offices now employ or want to on-board Chief Information Officers (CIOs) and Chief Financial Officers (CFOs) while building in-house teams or engaging external support for risk, tax, cybersecurity, due diligence and compliance. Cross-border investments, regulatory obligations, cybersecurity considerations and growing expectations around transparency are accelerating the adoption of technology-enabled reporting systems and advisory support.

After an exit, how should Indian families balance wealth preservation, intergenerational transfer, philanthropy and the next generation's desire to pursue new businesses or investments?

Selling a business is one of the most significant events an entrepreneurial family will experience. For years, the business has supplied identity, structure, and a shared sense of purpose. Once ownership has changed hands, however, the family faces a funda­mentally different task: shifting its focus from running an enterprise to stewarding wealth. Monetization needs to be thought of as a starting point rather than an endpoint. Capital creates a new imperative: moving from event-driven gains to structured, portfolio-led wealth management. In a changing macroeconomic environment, this shift is driving greater focus on diversification, income stability and non-correlated returns, prompting family offices to look beyond traditional asset classes. The growing relevance of real assets and alternative investments reflects this evolution in portfolio strategy, setting the stage for the next phase of capital deployment.