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Wealth in Canada: HNW Investors; Understanding HNW investors and wealth management strategies in Canada

Published: May 30, 2016 | Pages: 44 | Publisher: Verdict Financial | Industry: Wealth Management | Report Format: Electronic (PDF)


The HNW market in Canada is dominated by family business owners and expat clients drawn from Asia Pacific and the US. These busy owners prefer discretionary asset management and have little desire to try other options. As cautious investors they favor classic investments such as equities and bonds, investing little into less liquid assets such as property or commodities. Tax is a major issue for the domestic wealth market and a key driver for booking offshore.

Key Findings

- The majority of HNW individuals in Canada have accumulated their wealth through first-generation entrepreneurship and family businesses.
- Expats, particularly those from China and the US, represent large segments in the HNW market.
- Canadian HNW investors heavily favor equities, followed by the fixed income security of bonds.
- HNW individuals show a strong and enduring preference for discretionary asset management, in line with regional peers such as the US.
- Canadian HNW investors are preoccupied with tax issues. Demand for tax advice exceeds all other forms of financial planning and is also driving investors to book their money offshore.


Verdict Financial's “Wealth in Canada: HNW Investors” report analyzes the Canadian wealth management market, with a focus on the HNW segment's demographics, investment preferences and services demand. The report is based on our proprietary survey of wealth managers.

Specifically the report:

- Profiles the average Canadian HNW investor in terms of their demographics and analyzes the expat opportunity in Canada.
- Analyzes which wealth management mandates are preferred among Canadian HNW investors and how demand will develop looking forward.
- Examines the allocation of Canadian HNW investors' portfolios into different asset classes and how the allocation is expected to develop in the future.
- Analyzes product and service demand among Canadian HNW investors.

Reasons To Buy

- Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
- Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors' drivers for seeking investment advice vs self-directing.
- Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.
- Develop your service proposition to match product and service demand expressed by Canadian HNW investors and react proactively to the forecasted change in demand.
 Table of Content

Canadian HNW individuals are concentrated among business owners
Key findings
Critical success factors

Family business is the dominant source of Canadian HNW wealth
However, entrepreneurs are also a lucrative target market
Many HNW investors have built their fortunes through property
Expats are a large and important target group in Canada
Expats constitute 26.3% of the resident HNW population
Friendly visa conditions encouraged migration of the rich, although this route was closed in 2014
Chinese and US individuals represent the bulk of the HNW expat population
Fear of having insufficient control and steep forex fees motivate HNW expats to invest in Canada

Canadian HNW investors value professional advice and control over their investments
The majority of HNW wealth is kept in discretionary mandates
Canadian HNW individuals are increasingly looking at other asset management styles in a quest for control
Demand for all mandates is on the rise but discretionary will continue to win out
HNW investors' desire for control is prompting some to self-invest a minority of their assets

Canadians' love affair with equities is set to continue
Equities dominate the HNW portfolio and are forecast to experience the greatest increase in demand
Equities dominate HNW investors' managed wealth
Bond holdings remain above the global average
Cash and near-cash investments are well below average in Canada
Property is a small element of Canadian HNW investment portfolios
Commodity investments are of little interest to Canadian HNW clients
Canadian HNW investors are more open to alternatives than average

Planning services are in high demand in Canada
Canadian HNW individuals show strong demand for tax advice
An aging client base will make pension and inheritance planning much more sought after
Tax advice is in high demand in Canada
Multiple governments, each able to levy taxes, make Canadians keen on advice
Wealth managers lacking the in-house resources to provide tax advice need to address this immediately

Abbreviations and acronyms
Liquid assets
Mass affluent
Verdict Financial's 2015 Global Wealth Managers Survey
Further reading
About Verdict Financial
List of Figures

Figure 1: Business owners are the key demographic in Canada's HNW market
Figure 2: Business owners are given a holistic package of services at RBC Wealth Management
Figure 3: A booming property market has minted many HNW fortunes
Figure 4: Canada's open immigration system has generated a large HNW expat community
Figure 5: China has come to dominate the expat pool in Canada
Figure 6: HNW expats residing in Canada want to stay in control of their investments
Figure 7: Canadian wealth managers with private wealth management operations in Asia Pacific
Figure 8: Portfolio complexity and its attendant administrative burden drive Canadian HNW investors to opt for professionals
Figure 9: The majority of HNW wealth is kept in discretionary mandates
Figure 10: Canada's clear preference is for discretionary mandates followed by advisory
Figure 11: Discretionary mandates will go from strength to strength over the next two years
Figure 12: Canadian HNW investors' desire for control drives them to self-direct
Figure 13: HNW investors are heavily exposed to equities
Figure 14: Equity has been the top draw for HNW wealth in Canada
Figure 15: Rebounding stocks will drive interest in equities to new highs
Figure 16: Bonds have always figured prominently in the HNW portfolio
Figure 17: Fixed income will continue to form a major part of the total HNW portfolio
Figure 18: Rock bottom rates in North America have kept cash holdings low
Figure 19: HNW demand for cash products will rise modestly
Figure 20: Property does not figure prominently in the Canadian investment portfolio
Figure 21: Asset diversification opportunities are fueling HNW demand for property
Figure 22: Commodities are of little interest to Canadian HNW investors
Figure 23: Commodity investments are forecast to rise as HNW investors take advantage of buying opportunities
Figure 24: HNW investors prefer funds when it comes to alternative investments
Figure 25: Asset diversification benefits are driving HNW demand for alternatives
Figure 26: Financial planning is most in demand among Canadian HNW investors
Figure 27: BMO targets family business owners concerned about succession
Figure 28: Already strong HNW demand for planning services is forecast to increase
Figure 29: Tax advice turns clients' heads in Canada
Figure 30: Already high demand for tax planning advice is forecast to soar 

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