Ken Research has recently announced its publication, “Wealth in Canada: HNW Investors; Understanding HNW investors and wealth management strategies in Canada.”which aims at providing in-depth market analysis of Canadian wealth management market, with a focus on HNW segment’s demographics, investment preferences and services demand. It further examines the allocation of HNW Investors portfolios into different asset classes and gives insights of product and services demand among Canadian HNW investors.
High Net worth Individuals (HNWI) is a term often used in financial service industryto refer to those individuals whose membership in high net worth club is at least one million in liquid financial assets. Looking at HNW market in Canada, this report analyzes Canadian wealth management market, with a focus on HNW segment’s demographics, investment preferences and services demand. It further examines the allocation of HNW Investors portfolios into different asset classes and gives insights of product and services demand among Canadian HNW investors.
The HNW market in Canada is dominated by family business owners and expat clients drawn from Asia Pacific and The US. These owners prefer discretionary asset management and since they are very cautious investors they favor classic investments such as equities and bonds more than property and commodity. The majority of HNW individuals have accumulated their wealth through first-generation entrepreneurship and family business. Expats, particularly from China and The US, represent large segments in the HNW market.
Portfolio of an average HNW investor in Canada
Canadian HNW investors heavily favor equities, followed by fixed income security of bonds. Such investors are preoccupied with tax issues since they lie in highest income brackets in Canada. Thus, their portfolio construction takes into account such investment that can provide them with maximum yields and ensure minimum tax payments. Wealthy Canadians prefer dividend stocks since these have lower tax payments associated with them.
According to a survey done by the globe and mail in 2015 on 330 citizens of The US and Canada with portfolio investment worth between USD ten million to billion. Preferences of different assets of major net worth individuals of the sample are represented through pie chart below:
The survey concluded that real estate comprises of largest share of an average tiger 21 member portfolio followed by followed by public and private equities.
Sophisticated investment needs of the HNW investors show a strong and enduring preference for discretionary wealth and asset management services to supervise complex portfolio requirements. Thus, lawyers, accountants, business planning experts are crucial service providers for wealth management planning and they perform following functions:
Macroeconomic trends of HNW market in Canada
North America has highest population of HNW investors and highest amount of HNWI wealth in the world. Canada is contributing significantly in to HNWI wealth in North America.
However, many HNW investors continue to predict signs of trouble and weakness in Canadian economy and this is the reason they are cautious about placing too much money in Canadian economy.
Thus, key macroeconomic trends that may affect Canadian HNW market are:
For more coverage click on the link below:
Ankur Gupta, Head Marketing & Communications