The demographics of the wealthiest Canadians are changing, according to a study released by Toronto-based BMO Harris Private Banking on Thursday, and financial advisor practices need to adapt to meet the needs of these new clients.
The report, called the “Changing Face of Wealth Study,” looks at the demographic breakdown of high-net worth Canadians, defined as individuals with investible assets of $1 million or more.
According to the results, 48% of affluent citizens are either immigrants to Canada or are first-generation Canadians with at least one parent born outside of the country. In comparison, only one-third of new Americans account for the wealth in the U.S. Furthermore, the study also found that women make up one-third of high-net worth Canadians, an increase from 21% three years ago.
These statistics suggest that advisors should be re-evaluating their own practices, according to Yannick Archambault, vice president, chief operating officer, BMO Harris Private Banking in Toronto. “As the wealth continues to evolve,” says Archambault, “I think [advisors] need to take a step back, confirm and validate the information but more specifically, I would say adapt and evolve [their] business models.”
If, for example, advisors want to work with new Canadians from non-English speaking countries, says Archambault, they may want to ensure that at least one team member speaks the same language as their potential clients.
The study also found that 67% of affluent Canadians are self-made millionaires and that 80% of wealthy individuals have at least a university degree. Finally, high-net worth Canadians tend to be older with only four percent of wealthy citizens being under the age of 40, compared to 24% in the United States.
Study results were compiled through an online survey of 305 Canadian adults with $1 million or more in investible assets conducted by Pollara Strategic Insights between March 28, 2013 and April 11, 2013.