One of the significant divides between younger and older high net-worth (HNW) Canadians is that the former want to make a greater impact with philanthropy, legacy and social responsibility, according to a study conducted on behalf of RBC Wealth Management, a division of Toronto-based RBC Capital Markets.
The study defined HNW Canadians as those with a minimum of $1.29 million in investible assets, with younger respondents aged 18 to 53, and older respondents aged 54 and up.
Specifically, 73% of younger HNW Canadians surveyed say they will make more of an impact on the world than previous generations, while only 48% of older HNW Canadians feel the same way.
Among younger HNW Canadians who are business owners, 70% feel it’s important that their business makes a positive impact on their community compared with 58% of their older counterparts.
When speaking of “legacy,” older HNW Canadians are most likely to associate the term with “family” (75%) than younger HNW Canadians (50%). But, both generations can agree on one thing: they want to leave a different legacy than their parents (71% of younger respondents vs. 65% of older ones). For ultra HNW Canadians—those with a minimum of $6.47 million investible assets — that number increases to 79%.
“The concept of legacy has evolved a lot over the past several years so it makes sense that both younger and older HNW Canadians are looking at different options than their parents,” says Leanne Kaufman, head of RBC Estate and Trust Services, in a statement. “The trend is moving towards ‘impact’ in a way we haven’t seen before.”
Younger HNW Canadians also feel much more social responsibility than older generations. About two-thirds (66%) of younger Canadians say they’re obligated to use their wealth to benefit society compared to only 51% of the older cohort.
While younger HNW Canadians focus their attention on children, youth, human rights and scientific endeavours such as space exploration, older HNW Canadians put their money toward poverty reduction and religion. Older wealthy Canadians are also more inclined to make one-off charitable donations than their peers (36% vs. 11%).
“These results are not surprising as younger Canadians tend to be more personally involved and invested in their charitable efforts from start to finish,” says Tony Maiorino, head of RBC Wealth Management Services, in a statement.
“They’re not so interested in simply writing a cheque; they want to see it through, monitor the results and actually know that they have made a positive difference.”
Lastly, the study revealed that younger HNW Canadians feel a greater obligation to transfer wealth to the next generation (71% vs. 54%).
Of those who are business owners, two-thirds (67%) of younger HNW Canadians want their children to take over the business compared to 31% of older Canadians. However, younger HNW Canadians don’t have much interest in taking over their parents’ jobs. Approximately 50% of the younger group said they are expected to do so, but a full 70% say younger Canadians in general would rather join the corporate world or start their own business.
London, U.K.-based The Economic Intelligence Unit completed a global study of 1,051 HNW individuals, including 259 participants from Canada, from March to May 2018.