Canada's millionaires concerned about next generation's
financial future: RBC
Majority believe their children will have more difficulty
financially; almost half concerned about readiness to manage
inheritance
TORONTO, September 30, 2010 — Canada's
millionaires are worried about the next generation's financial
future with 58 per cent believing their children will have
a more difficult time making it financially than they did,
according to new research by RBC Wealth Management. Furthermore,
almost half (49 per cent) of those surveyed are concerned
about their children's readiness to successfully manage a
potential inheritance and one-third (35 per cent) believe
their children are too focused on the short term and may take
wealth for granted.
Over half (53 per cent) of Canadian millionaires - and 67
per cent of those with assets of over $5 million - feels a
responsibility to preserve wealth for future generations.
At the same time, many have not yet made any formal efforts
to ensure the successful transfer of their assets: 39 per
cent do not have an estate plan in place and one-in-five (22
per cent) have not even considered getting one.
"Effectively managing and protecting wealth is a challenge
for everyone - millionaire or not," said Anthony Maiorino,
VP and head, RBC Wealth Management Services. "It is critical
to have a long-term plan that reflects personal goals and
what is needed to achieve them. We work closely with our clients
to develop wealth management strategies that meet their goals
of preserving wealth for their children and grandchildren,
while also building for a rewarding retirement."
Seventy-nine per cent of Canada's high net worth individuals
are proud of what they have accomplished financially and the
vast majority (90 per cent) think it is important for children
to learn the value of money through hard work. The wealth
of Canadian millionaires is by and large self-made, with wages
and investment gains accounting for the largest source of
assets for 25 per cent, while only eight per cent inherited
the bulk of their wealth.
When asked about the critical factors to their financial
success, 60 per cent of Canadian millionaires cite a diligent
focus on long-term financial security, 54 per cent note a
strong influence of parents or grandparents in instilling
the value of a dollar and more than a quarter acknowledge
luck, an entrepreneurial spirit and a strong investment advisor
relationship (29, 28 and 25 per cent). Only 10 per cent feel
that a fear of a failure was a key driver for them.
"Second and third generations can learn a lot from those
who succeeded financially before them," said Maiorino.
"Wealth can erode quickly, but taking a long-term view,
having an engrained recognition of value, and establishing
strong advisor relationships will help to ensure financial
success."
Canada's millionaires: facts and figures:
- Their average age is 54
- The majority (59 per cent) are married with grown children
- They are well educated - 28 per cent have post grad degrees
- They accumulated their first $1 million in assets by age
42
- 31 per cent have household incomes under $150k, one-third
(33 per cent) $150k-$300k and 30 per cent $300k + (seven
per cent preferred not to say)
- 40 per cent are business owners
- 21 per cent were born outside of Canada (and 29 per cent
of those with assets of more than $5 million)
- Younger millionaires (under 45 with more than $1 million
in investable assets):
- are generally wealthier with 35 per cent having accumulated
assets of more than $5 million
- are increasingly entrepreneurial with over half (53
per cent) owning a business
- are more likely to have been born outside of Canada
(27 per cent, compared to 20 per cent of those aged
45 and over).
These are some of the findings from a survey conducted by
wealth marketing firm HNW, Inc. through July and August 2010.
A national sample of 399 adults with investable assets of
at least $1 million was surveyed via an online questionnaire.
Questions specifically related to children are based on a
sample of 279. The margin of error for a sample of 399 is
±4.9 per cent in 95 out of 100 cases.
About RBC Wealth Management
RBC Wealth Management directly serves affluent and high
net worth clients in Canada, the United States, Latin America,
Europe and Asia. RBC Wealth Management provides integrated
and diversified international wealth management expertise
and solutions, asset management and trust services to high
net worth individuals and to corporate and institutional clients.
Services provided by RBC Wealth Management consultants, advisors,
private bankers and trust officers include trust and estate
planning, tax advice, discretionary investment management
and investment advisory services, structured solutions, banking,
lending and global custody. RBC Wealth Management has more
than C$490 billion of assets under administration, nearly
C$240 billion of assets under management and more than 4,500
financial consultants, advisors, private bankers and trust
officers.
About HNW Inc.
HNW, Inc. is a strategic marketing services firm focused exclusively
on the high-net-worth segment. Its deep understanding of the
wealthy - including their investments, lifestyle and philanthropy
- paired with a powerful suite of software services make the
firm a trusted advisor to the world's leading financial services
and luxury brands.
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For more information, please contact:
Claire Holland, RBC, 416-974-9334
Chris Dotson, RBC, 604-408-6009
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