High net-worth Canadians are shifting their focus from generating wealth to preserving what they have, with 82 per cent saying it’s more important than ever to ‘future-proof’ their wealth, says a new study released Wednesday by RBC Wealth Management.
The reasons for that include market uncertainty, geopolitical turmoil and home-grown tax changes.
Tony Maiorino
RBC Wealth Management Services
“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,” said Tony Maiorino, Head, RBC Wealth Management Services, in a news release.
The study said the richest Canadians ranked protecting wealth for the future highest (53 per cent) in a list of financial goals, well above increasing their wealth (34 per cent).
“When asked what factors most concern them when it comes to preserving wealth, Canadian tax changes were highest on the list (48 per cent) followed by global economic uncertainty (46 per cent) and increased cost of living (45 per cent),” said RBC Wealth Management.
“While only a third of wealthy Canadians are concerned about market uncertainty in Canada (34 per cent), two thirds (63 per cent) 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.”
The report said younger Canadians are more likely (73 per cent) than older Canadians (66 per cent) 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 per cent) as older Canadians (nine per cent) to strongly agree with this sentiment. The younger group was also much more likely to say it’s important to consider ESG (environmental, social, governance) factors when investing (56 per cent) 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 per cent) versus the younger group (56 per cent).”
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