A new report from Cap Gemini Ernst & Young says that there are now 315,000 Canadians with $1 million of investable financial assets. That’s up 90,000 from five years ago, and that number is projected to grow by 9% per year to exceed $4 trillion by 2010.

“Our projections show that by 2010, there will be over 900,000 of these high net worth individuals,” said Colin Deane, principal, Cap Gemini Ernst & Young Canada.

Inheritance money is one major source of wealth for many of these Canadians. In 2000, there were around 64,000 estate settlements with a total value of $40 billion. An estimated 150,000 Canadians received amounts of over $10,000 from these inheritances. The number of inheritances is projected to grow steadily and increase in value to $70 billion per year by 2010. The total value of inheritances expected to be received from Canadian sources over the next 10 years is $550 billion.

“As the inheritance trend grows, it’s reasonable to assume that many of the new high net worth individuals who receive sizable inheritances will require help with their financial planning needs,” said Deane.

“When one considers that, currently, less than 25% of the population with over $100,000 of investable assets manages their investments totally on their own, it becomes evident that the trend towards using financial advisors is both an opportunity for investment dealers, discount brokers, financial planners and the like, and a wake-up call for financial services businesses who have been losing ground to these intermediary providers.”

The report found that 42% of Canadian high net worth individuals live in Ontario, 21% are from Quebec, 17% hail from the Western provinces, and 16% reside in B.C.

Of course the purpose of the report from Cap Gemini’s perspective is also to look at financial firms’ technology needs and sell its consulting services. It says that, “Most of the established players in the Canadian wealth management services market will be successful to some extent, due to the expected growth in the pool of investable financial assets. However, those businesses that are most successful in mastering Customer Relationship Management will be able to create more opportunities to grow at a faster rate than the industry as a whole.”

It argues that to adequately service the needs of high net worth individuals, significant further investment in information technology will be required. “The trend towards aggregated accounts, which provide a statement of a client’s full net worth, is already growing in the United States. It won’t be long before clients in Canada will demand to see similar statements on-line,” said Deane.