High-net-worth Canadians shift focus from generating wealth to preserving what they have

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82% say it’s more important than ever to ‘future-proof’ their wealth

TORONTO , Sept. 11, 2019 /CNW/ – Market uncertainty, geopolitical turmoil and home-grown tax changes have Canada’s wealthiest citizens shifting their focus from increasing their wealth to protecting what they have. In a recent global survey1 sponsored by RBC Wealth Management and conducted by the Economist Intelligence Unit, the richest Canadians ranked protecting wealth for the future highest (53%) in a list of financial goals, well above increasing their wealth (34%). When asked what factors most concern them when it comes to preserving wealth, Canadian tax changes were highest on the list (48%) followed by global economic uncertainty (46%) and increased cost of living (45%).

These sentiments are familiar to Tony Maiorino , Head, RBC Wealth Management Services, who leads a team of 200 tax planning, legal and financial planning experts: “While investment and portfolio management remain a priority, increasingly, we find that our high-net-worth clients are asking us for guidance and support in the areas of tax strategy, wealth preservation, estate planning and philanthropy.”

While only a third of wealthy Canadians are concerned about market uncertainty in Canada (34%), two thirds (63%) said they are far more attentive to their portfolios now than in the past because of the current economic cycle and 76 per cent agreed that today’s market requires investors to be more flexible and more responsive.

Future-proofing wealth, enjoying experiences more important than material goods
Despite healthy bank accounts, a majority of wealthy Canadians said it’s important that they not appear ‘showy’ with their money (77%) with less than half (42%) agreeing that buying luxury goods makes them feel good about what they have accomplished. While it’s tempting to attribute this to stereotypical Canadian modesty, the Canadian numbers were in line with global findings. Almost three quarters of Canadian respondents (74%) agreed they prefer to spend their money on experiences rather than material goods.

And while 81 per cent of older2 high-net-worth Canadians feel they are not obligated to leave their children an inheritance, more than half (57%) plan to use their money to support the success of their children both personally and professionally.

Widening gap in approach to equality between younger and older wealthy Canadians
Generally, survey responses don’t vary between older and younger3 high-net-worth Canadians but the gap starts to widen when it comes to their approach. Younger Canadians are more likely (73%) than older Canadians (66%) to agree there should be a balance between personal wealth creation and ensuring equal opportunities to accumulate wealth across society. And while 62 per cent of all Canadian respondents agreed it’s important to invest ethically, younger wealthy Canadians were more than twice as likely (21%) as older Canadians (9%) to strongly agree with this sentiment. The younger group was also much more likely to say it’s important to consider ESG factors when investing (56%) versus only 27 per cent of older wealthy Canadians.

The generations differ greatly in their comfort level with various asset classes. While stocks are still the main asset of all high net worth Canadians, the older cohort much more likely to hold them (80%) versus the younger group (56%).

About RBC Wealth Management
RBC Wealth Management is one of the world’s top five largest wealth managers*. RBC Wealth Management directly serves affluent, high net worth and ultra high net worth clients globally with a full suite of banking, investment, trust and other wealth management solutions, from our key operational hubs in Canada , the United States , the British Isles, and Asia . The business also provides asset management products and services directly and through RBC and third party distributors to institutional and individual clients, through its RBC Global Asset Management business (which includes BlueBay Asset Management). RBC Wealth Management has C$1.05 trillion of assets under administration, C$738 billion of assets under management and more than 4,800 financial consultants, advisors, private bankers, and trust officers. For more information, please visit www.rbcwealthmanagement.com.

*Scorpio Partnership Global Private Banking KPI Benchmark 2018. In the United States, securities are offered through RBC Wealth Management, a division of RBC Capital Markets, LLC, a wholly owned subsidiary of Royal Bank of Canada. Member NYSE/FINRA/SIPC.

 

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1

Commissioned by RBC Wealth Management, The Economist Intelligence Unit (EIU) undertook a global study of 1,051 high-net-worth individuals (HNWIs; those with at least US$1MM (C$1.35MM) in investable assets), 522 adult children of HNWIs and 521 respondents who are not yet HNWIs but who have a minimum income of US$100,000 (C$134,000). The study took place from May to June, 2019 and included 614 respondents in Canada. The margin of error on the Canadian sample is 4.0% with a 95% confidence level. The survey explored the shifting landscape of global wealth looking at looking at where wealth will be, what it will be invested in, how it will be invested and who is investing.

2

Born in 1964 or earlier

3

Born between 1965 and 1997

 

SOURCE RBC Wealth Management

View original content: http://www.newswire.ca/en/releases/archive/September2019/11/c4045.html