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Affluent/Mass Affluent Investing and Banking - Canada - November 2016

Published By :

Mintel

Published Date : Nov 2016

Category :

Banking

No. of Pages : N/A

Financial advisors serving the affluent must not only develop a wider range of skills but also understand their attitudinal differences such as those related to risk perception and charitable giving.

Table of Contents

OVERVIEW
Regional classifications
Income
Affluent and mass affluent
Glossary

EXECUTIVE SUMMARY
The issues
Around one in four millionaires uses a bank affiliated brokerage for investments
Figure 1: Type of financial institution used for investments, by affluence, September 2016
More than half of the affluent feel they require more than a million dollars for retirement
Figure 2: Attitudes related to retirement (% any agree), by affluence, September 2016
Around one in ten millionaires has invested in hedge funds
Figure 3: Investment related activities, by affluence, September 2016
Affluent may have a different perception of risk
Figure 4: Attitudes related to investment strategies (any agree %), by affluence, September 2016
The opportunities
Robo-advisors and the mass affluent opportunity
Advisors catering to the affluent require a larger tool-box of skills
Understanding the nuances of charitable giving
What it means

THE MARKET – WHAT YOU NEED TO KNOW
CRM2 and its impact
Canada’s economy still struggles
Robo-advisors

MARKET FACTORS
CRM2 and its impact
Shift in compensation methods may be a long-term effect of CRM2
Canada’s economy still struggles
Robo-advisors

KEY PLAYERS – WHAT YOU NEED TO KNOW
TD and Scotiabank streamline services to high net-worth investors
BMO targets high-net-worth seniors in new wealth management program
New bank opens targeting Chinese Canadians
CIBC offers a digital advice channel
Bank of Montreal robo-advisor offers its ETFs
Wealthsimple reaches $500 million in assets

INDUSTRY DEVELOPMENTS
Wealth Management Services
TD and Scotiabank streamline services to high net-worth investors
BMO targets high-net-worth seniors in new wealth management program
New bank opens targeting Chinese Canadians
National Bank opens a private banking wing in Vancouver
Robo-advisors
CIBC offers a digital advice channel
Bank of Montreal starts robo-advisor offering its ETFs
Wealthsimple reaches $500 million in assets
Nest Wealth
WealthBar
ModernAdvisor
Innovations from across the border (US examples)
Robinhood-free discount brokerage
Acorns Grow Inc
Fidelity Go

MARKETING CAMPAIGNS
Selected Campaigns from Mintel Comperemedia
Sentry Investments addresses the issue that women may outlive their retirement savings
Figure 5: Sentry investments print advertisement, September 2016
Fidelity pitches steady returns
Figure 6: Fidelity print advertisement, September 2016
Edward Jones highlights its personalized wealth management service
Figure 7: Edward Jones online advertisement, September 2016

THE CONSUMER – WHAT YOU NEED TO KNOW
Some 6% of Canadians have more than a million in investments
More than half of Canadians have their investments with a bank
Men are more proactive with regard to financial planning activities
Majority of investors favour a conservative approach while the affluent may have a different risk perception
Green or ethical issues are not particularly important to most investors
More than half of the affluent feel they require above a million dollars for retirement

AFFLUENCE AND PRODUCT OWNERSHIP
Some 6% of Canadians have more than a million in investments…
Figure 8: Breakdown of affluence (investments excluding pensions), September 2016
…and 15% have a net worth of more than a million
Figure 9: Breakdown of net worth (including real estate and pensions), September 2016
More than half of consumers have a TFSA and/or an RRSP…
Figure 10: Product ownership, September 2016
…while a third of millionaires own ETFs and around a quarter own investment property
Figure 11: Product ownership by those with over a million dollars, September 2016
Almost a third of consumers have five or more investment products
Figure 12: Repertoire analysis of product ownership, September 2016

INVESTMENT ADVISORY SERVICES
More than half of Canadians have their investments with a bank
Figure 13: Type of financial institution used for investments, September 2016
Around one in four millionaires uses a bank affiliated brokerage for investments
Figure 14: Type of financial institution used for investments, by affluence, September 2016
Trust in independent advisors increases with affluence
Figure 15: Attitudes to financial advice, by affluence, September 2016
Most investors prefer in-person meetings with an advisor
Figure 16: Attitudes about client expectations, September 2016
Affluent have clear knowledge of advisor expectations
Figure 17: Attitudes about financial advisors, by affluence, September 2016

FINANCIAL PLANNING ACTIVITIES
Over a third of Canadians have discussed retirement planning with an advisor
Figure 18: Financial planning activities, September 2016
Men are more proactive with regard to financial planning activities
Figure 19: Financial planning activities, significant differences by gender, September 2016
Younger investors more likely to explore hedge funds and off-shore tax planning
Figure 20: Financial planning activities (select), by age, September 2016
Around one in ten millionaires has invested in hedge funds
Figure 21: Investment related activities, by affluence, September 2016
Affluent more likely to have sold a business
Affluent Canadians are more proactive about using insurance as part of their financial plan
Figure 22: Insurance planning, by affluence, September 2016
Affluent Canadians also more likely to receive legal advice and explore offshore tax planning
Figure 23: Legal, estate and tax planning, by affluence, September 2016

INVESTING PREFERENCES AND STRATEGIES
Majority of investors favour a conservative approach…
Figure 24: Attitudes related to investment strategies, September 2016
Around two thirds feel that investing in property is safer than the stock market
…while the affluent may have a different perception of risk
Figure 25: Attitudes related to investment strategies (% any agree), by affluence, September 2016
Green or ethical issues are not particularly important to most investors
Figure 26: Attitudes related to investment preferences, (any agree %), September 2016
Men and Chinese Canadians more willing to buy investments online
Older investors have most of their assets in Canada
Older investors more likely to rate home ownership as their best investment

FINANCIAL ADVICE
Majority believe referrals are the best way to choose a financial advisor
Figure 27: Attitudes related to financial advice, September 2016
Higher income more willing to buy investments from their insurance company
Young males more willing to use robo-advisors
Robo-advisors and the mass affluent opportunity
Higher income earners more willing to buy investments from their insurance company
Reliance on a financial advisor is high among the affluent
Men are more aware of investment fees
Figure 28: Attitudes related to financial advice, September 2016
Awareness of fees increases with affluence
Figure 29: Attitudes related to financial advice, by affluence, September 2016

RETIREMENT AND ESTATE PLANNING
Retirement needs of the affluent significantly more than that of the mass affluent
Figure 30: Attitudes related to retirement (% any agree), September 2016
45-64s more likely to feel they would use most of their retirement savings
More than half of the affluent feel they require above a million dollars for retirement
Figure 31: Attitudes related to retirement (% any agree), by affluence, September 2016
Advisors catering to the affluent require a larger tool-box of skills
Most Canadians are not very focused on leaving money for charities
Figure 32: Attitudes related to estate planning (% any agree), September 2016
One in five affluent investors is interested in philanthropic giving
Figure 33: Attitudes related to charities (% any agree), by affluence, September 2016
Understanding the nuances of charitable giving

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