Wealth Landscape in Canada: Market Sizing and Opportunities to 2022

Wealth Landscape in Canada: Market Sizing and Opportunities to 2022

Summary

The HNW and mass affluent opportunity in Canada is sizable. The two population segments collectively held 84% of the country’s total onshore liquid assets in 2018, with the mass affluent segment alone holding more than half of total liquid assets.

Just like their peers in much of the developed world, Canadian HNW investors hold the majority of their investments in liquid assets such as equities, mutual funds, and deposits, with liquid assets accounting for 81.7% of their total investments in 2018. However, wealth managers must also focus on the slowly increasing investments in illiquid assets seen in recent years, with this trend set to continue going forward.

HNW and mass affluent individuals accounted for 28.6% of Canada’s total adult population in 2018. Between 2013 and 2017, the liquid wealth held by these individuals saw a compound annual growth rate (CAGR) of 6.8%. Growth is expected to remain at the same level over 2018-22.

Historically retail investors have favored deposits, with 41.8% of overall balances held in deposits in 2016. However, 2017 saw mutual funds become the largest holding, accounting for 41.4% of the market compared to 40.2% of deposits. This trend will continue over the forecast period, with mutual funds gaining an increased share. This in turn will positively contribute to wealth growth, given the low yields deposits offer.

In 2018, 15.3% of Canadian HNW investors’ assets were held outside of the country. Equities remain the preferred offshore asset class among Canadian HNW investors, accounting for half of their total offshore investments. The US is the preferred booking center. However, given the strong correlation between the US and Canadian stock markets, HNW investors will find it challenging to achieve the diversification benefits they are seeking.

Companies mentioned: RBC, Bank of Canada, TD Canada Trust, Bank of Montreal, Scotiabank, CIBC, HSBC (Canada), National Bank, EidoSearch, Wealthsimple, Nest Wealth Pro, Ninepoint Partners, LOGiQ Global Partners, Onex Corporation, Gluskin Sheff + Associates, CI Financial, WealthBar Financial Services, Echelon Wealth Partners, Dundee Securities, d1g1t

Scope

• HNW and mass affluent individuals accounted for 28.6% of Canada’s total adult population in 2018, with these individuals holding a considerable share of total liquid assets in Canada.


• Mutual funds overtook deposits to become the dominant liquid onshore asset class in 2017.


• In 2018, 15.3% of Canadian HNW investors’ assets were held outside of the country, predominantly in equities.

Reasons to Buy

• Make strategic decisions using top-level historic and forecast data on Canada’s wealth industry.


• Identify the most promising client segment by analyzing penetration of affluent individuals.


• Receive detailed insight into retail liquid asset holdings in Canada, including deposits, mutual funds, equities, and bonds.


• Understand changing market and competitive dynamics by learning about new competitors and recent deals in the wealth space.


• See an overview of key digital disruptors in the country’s wealth market.