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Wealth in Canada: Sizing the Market Opportunity 2018

  • ID: 4726770
  • Report
  • Region: Canada
  • 39 pages
  • GlobalData
1h Free Analyst Time

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Wealth in Canada: Sizing the Market Opportunity 2018

Summary

Canada became the strongest G7 economy in 2017 with GDP growth at 3%, having weathered the oil price crisis of the past two years. This in turn influenced growth in the country’s wealth market in 2017. The future outlook however, is that the pace of economic and wealth market growth will reduce due to geopolitical risks, and increasing interest rates affecting consumer spending.

This report analyzes the Canadian wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.

Specifically the report -
  • Sizes the affluent market (both by the number of individuals and value of their assets) using proprietary datasets
  • Examines HNW clients’ attitudes towards non-liquid asset classes, such as property and offshore investments
  • Analyzes which asset classes are favored by Canadian investors and how their preferences impact the growth of the total savings and investments market
  • Evaluates the size of the retail non-resident (offshore) market in Canada and foreign investors’ preferences.
Scope
  • Affluent individuals held just under 80% of Canada’s total liquid assets at the end of 2017.
  • HNW individuals account for less than 1% of the total population, but hold over a quarter of the country’s wealth.
  • Mutual funds have overtaken deposits, with the largest share of Canadian retail investor portfolios at 41%. This is mainly driven by balanced funds, as investors embrace the benefits of diversification.
  • Rising interest rates have slowed the rate of growth in deposits as consumers have had to spend more servicing debt; however, the hikes influenced the inflow of new money into bond holdings.
  • The non-resident investments market in Canada is small, but reached an all-time high in 2017. Equities remain the largest offshore investment asset class.
Reasons to Buy
  • Benchmark your share of the Canadian wealth market against the current market size
  • Forecast your future growth prospects using our projections for the market to 2022
  • Identify your most promising client segment by analyzing the penetration of affluent individuals in Canada
  • Evaluate your HNW proposition by understanding how economic and political changes affect your HNW clients
  • Review your offshore strategy and offering for non-resident investors by learning about the dynamics in these markets.
Note: Product cover images may vary from those shown
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1. EXECUTIVE SUMMARY
1.1. Economic improvements steered growth in the Canadian wealth market
1.2. Key findings
1.3. Critical success factors

2. THE CANADIAN WEALTH MARKET GREW IN 2017 DUE TO POSITIVE ECONOMIC GROWTH
2.1. Introduction
2.2. Canadian wealth market growth will ease in future years
2.2.1. 2017 saw positive growth in the Canadian economy
2.2.2. Over a quarter of the Canadian population are affluent
2.2.3. The proportion of liquid assets held by HNW individuals increased by 0.5pp in 2017
2.2.4. Nearly 17% of HNW wealth is held in illiquid assets
2.3. Offshore investments account for 15% of Canadian HNW assets
2.3.1. Geographic diversification drives Canadian residents to invest offshore
2.3.2. Canada is becoming stricter on compliance and transparency

3. MUTUAL FUNDS ACCOUNT FOR THE LARGEST SHARE OF RETAIL INVESTORS’ PORTFOLIOS
3.1. Introduction
3.2. All asset classes will continue to grow and mutual funds will continue to form the largest proportion
3.2.1. Positive stock market performance will continue to support growth
3.3. Mutual funds and equities growth rates follow trends on the stock market
3.3.1. The TSX is dominated by financial services and industrial products and services
3.3.2. Equity investors remain cautious
3.3.3. Mutual funds are the leaders of growth
3.4. Deposits experienced slight growth in 2017
3.4.1. Despite rising interest rates, deposit balances experienced the slowest growth in years
3.5. Slow but steady growth is the outlook for bonds
3.5.1. Unlike many countries, Canadian bonds continue to grow

4. THE CANADIAN OFFSHORE MARKET LOOKS PROMISING
4.1. Introduction
4.2. Equities are the most popular asset for non-residents

5. APPENDIX
5.1. Abbreviations and acronyms
5.2. Supplementary data
5.3. Definitions
5.3.1. Affluent
5.3.2. Domicile
5.3.3. Double taxation convention
5.3.4. Emerging affluent
5.3.5. FATCA
5.3.6. HNW
5.3.7. Individual
5.3.8. Liquid assets
5.3.9. Mass affluent
5.3.10. Mass market
5.3.11. Onshore
5.3.12. Residency
5.3.13. Exchange of information
5.3.14. TIEAs
5.4. Methodology
5.4.1. 2018 Global Wealth Managers Survey
5.4.2. Retail Investments Analytics
5.4.3. Global Wealth Model
5.4.4. Exchange rates
5.5. Bibliography
5.6. Further Reading

List of Tables
Table 1: Number of adults in Canada segmented by asset band (000s), 2012-17
Table 2: Number of adults in Canada segmented by asset band (000s), 2018-22f
Table 3: Retail liquid assets in Canada segmented by asset band ($m), 2012-2017
Table 4: Retail liquid assets in Canada segmented by asset band ($m), 2018-22f

List of Figures
Figure 1: 27% of the Canadian population is affluent
Figure 2: Affluent individuals account for 80% of total liquid assets
Figure 3: 16.5% of HNW wealth was held in illiquid assets in 2017
Figure 4: Alternative investments are expected to increase the most in demand
Figure 5: Offshore investments by Canadian residents are below the global average
Figure 6: Canada has adopted the OECD’s Common Reporting Standard
Figure 7: Mutual funds are now the largest asset class
Figure 8: Mutual funds have the largest retail balance
Figure 9: The financial services sector has the largest stock market weighting
Figure 10: Ongoing positive stock market performance has helped boost equities
Figure 11: Positive stock market performance boosted mutual funds in 2017
Figure 12: Deposit inflows decreased in 2017
Figure 13: Bonds will increase at a more sedate pace
Figure 14: Deposits saw the largest growth among non-resident retail investors
Figure 15: Example of a four-input forecasting process
Note: Product cover images may vary from those shown
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