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- Canadian Mass Affluents - December 2011
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Canada may be a small country in terms of population, but a relatively high percentage of them are quite affluent. About one-third of Canadian households earn C$100K+, and 22% earn C$150K+. An outsize percentage of the most affluent are new immigrants, mainly from Asia, who are driving population growth.
This study is a comprehensive update of the Canadian mass affluent market and the way in which financial services organisations seek to cater for this market segment. The definition of “mass affluent” is a fluid one, but for the purposes of this report, Mintel has concentrated on Canadians with at least $100,000 in investible assets. It covers the competitive landscape, consumer behaviors and attitudes, the regulatory and legislative environment, profitability and growth drivers, and current marketing strategies.
What you need to know:
- What is the size of the mass affluent market in Canada?
- What is driving the growth in mass affluents in Canada?
- What is the competitive landscape and regulatory environment in the financial services industry?
- What internal and external factors will have an impact on the Canadian economy over the next few years?
Scope and Themes
What you need to know
Data sources
Consumer survey data
Abbreviations and terms
Abbreviations
Companies mentioned in this report
Executive Summary
Industry overview
The consumer: financial and investment decision-making
Credit cards, mobile phones, and payment behavior
Bank communications and financial information
Marketing strategies and channels
Who are the innovators?
Insights and Opportunities
Key points
Canada’s highest earners could use some debt management advice
Many Canadians don’t have a financial plan, but might need one
Alerts service may pave the way for mobile payments
Inspire Insights
Trend: Edutainment
What we've seen
Industry application
Trend: Guiding Choice
What we've seen
Industry application
Market Size
Key points
One third of Canadian families earn $100K+
Figure 1: Canadian families, by income range, 2005-09
Ottawa has highest median incomes
Figure 2: Median total income of census families by family type and metro area, 2009
Population of Canada is 34.5 million and growing
Figure 3: Population of Canada by province, 2007-11
Competitive Context
Key points
The Big Five control more than 80% of the Canadian banking market
Figure 4: Market shares of Big Five Canadian banks, by assets, July 31, 2011
Figure 5: Net income at Big Five Canadian banks, first three quarters of 2011
Three big companies dominate life insurance market
Figure 6: Large Canadian life insurers, assets and market shares, Q2 2010 vs. Q2 2011
Figure 7: Net income at big Canadian life insurers, first half 2011
Financial regulation in Canada constrains competition
Economic Context
Key points
Canadian economic growth forecast for 2011-12 scaled back
IMF sounds warning on Canadian household debt
Home prices have outpaced household incomes by a wide margin
Figure 8: Canadian home prices, June 2005-August 2011
Marketing Channels
Key points
Canadian financial planners can benefit from social media
Calgary firm uses online community to vote on funding projects
Market Drivers
Key points
Entrepreneurship drives wealth
Business equity is largest asset held by wealthiest Canadians.
Canada’s population growth is being driven by affluent immigrants
More than one in four expected to be foreign born by 2031
Immigration to Canada is “sticky”— nearly 80% become citizens
More than one third of immigrants come from three Asian countries
Figure 9: Canada: Permanent residents by source country, 2005-10
Leading Companies
Key points
Retail banks
Royal Bank of Canada
TD Bank (Toronto-Dominion)
Bank of Nova Scotia (Scotiabank)
Bank of Montreal (BMO)
CIBC (Canadian Imperial Bank of Commerce)
National Bank Financial Group
Desjardins Group (Fédération des Caisses Desjardins du Québec)
President’s Choice Financial (PC)
Canadian Tire Financial Services
HSBC Bank Canada
Card issuers
Capital One Bank Canada
American Express
Insurance companies
Manulife Financial
Sun Life Financial
Great-West Lifeco
Intact Insurance
Innovation and Innovators
Key points
BMO rolls out 'Tap and Go' payment solution for mobile phones
Manulife offers three-in-one insurance product
CIBC is first to offer mobile stock trading application
TD launches no-fee auto rewards credit card
Capital One adds two new cash-back Aspire cards
National Bank of Canada initiates Quebec stock index
Canadian Tire teams with GaggleUp to offer savings, boost rewards
RBC announces collaboration with Travelocity
National Bank Securities launches new portfolios aimed at recent retirees
BMO introduces home ownership app for iPhone and Android devices
BMO MoneyLogic lets customers track and manage spending and saving
RBC Wealth Management launches major global branding campaign
CIBC Wealth Builder Option for mortgages helps grow investments
Marketing Strategies
Key points
Overview
Representative direct mail advertising
Mutual Fund from President's Choice Financial
Figure 10: President’s Choice direct mail ad, August 2011
Term Life Insurance from Manulife
Figure 11: Manulife direct mail ad, September 2011
Marriott Rewards Platinum Visa Card from Chase
Figure 12: Chase Visa direct mail ad, August 2011
Starwood Preferred Guest Credit Card from American Express
Figure 13: Starwood Preferred Guest American Express direct mail ad, August 2011
Equity Power Mortgage from HSBC
Figure 14: HSBC Premier direct mail ad, August 2011
Home Equity Loans from HSBC Finance Mortgages Inc.
Figure 15: HSBC Finance direct mail ad, August 2011
The Search for Yield Seminar from TD Bank Financial Group
Figure 16: TD Bank direct mail ad, May 2011
Insurance Quote from RBC
Figure 17: RBC direct mail ad, August 2011
Home and Car Insurance from RBC
Figure 18: RBC Insurance direct mail ad, August 2011
Tax-Free Investment Savings Account from ING
Figure 19: ING Direct direct mail ad, January 2011
The Consumer—Who Makes Financial Decisions?
Key points
Just 5% rely on financial advisors
Figure 20: Primary investment decision maker, by gender, September 2011
Youngest respondents most likely to go it alone
Figure 21: Primary investment decision maker, by age, September 2011
Little differences among income groups
Figure 22: Primary investment decision maker by household income, September 2011
Who Pays the Bills in the Household?
Key points
Paying bills is a one-(wo)man job
Figure 23: Person primarily responsible for everyday financial tasks, by gender, September 2011
Figure 24: Person primarily responsible for everyday financial tasks, by age, September 2011
Figure 25: Person primarily responsible for everyday financial tasks by household income, September 2011
Nine out of 10 pay bills online, mostly at bank’s website
Figure 26: Method for paying bills, by gender, September 2011
Nearly 80% of the oldest group pay bills online
Figure 27: Method for paying bills, by age, September 2011
Highest earners more likely to pay bills online
Figure 28: Method for paying bills, by household income, September 2011
Most are Confident about Saving for Retirement
Key points
Two thirds of the affluent are on track for funding retirement
Figure 29: Attitudes about household financial situation, by gender, September 2011
Oldest respondents are most confident about retirement
Figure 30: Attitudes about household financial situation, by age, September 2011
Highest earners are most worried about their debt burdens
Figure 31: Attitudes about household financial situation, by household income, September 2011
Easterners more confident about life insurance coverage
Figure 32: Attitudes about household financial situation, by province, September 2011
Preferred Marketing Channels
Key points
Most affluent Canadians rely on professional’s advice when buying financial products
Figure 33: Attitudes about insurance and advertising by gender, September 2011
Older people more likely to rely on professionals
Figure 34: Attitudes about financial products and advertising, by age, September 2011
Highest earners tend to be do-it-yourselfers
Figure 35: Attitudes about financial products and advertising, by household income, September 2011
Responses vary by geography
Figure 36: Attitudes about financial products and advertising, by province, September 2011
Miles Trump Cashback for Credit Card Rewards
Key points
Well-off Canadians love their credit card miles
Figure 37: Attitudes about credit cards, by gender, September 2011
Youngest group is least fond of annual fees
Figure 38: Attitudes about credit cards, by age, September 2011
Highest earners less likely to pay credit card bills in full
Figure 39: Attitudes about credit cards, by household income, September 2011
Most are Worried about Mobile Payment Security
Key points
Nearly half of affluent consumers say they would not use mobile phones for payment
Figure 40: Attitudes about mobile payments, by gender, September 2011
Youngest group is most open to mobile payments
Figure 41: Attitudes about mobile payments, by age, September 2011
Highest earners more willing to go mobile
Figure 42: Attitudes about mobile payments, by household income, September 2011
Bank Communications Could be Improved
Key points
Consumers want more—and better—information
Figure 43: Attitudes about financial communications, by gender, September 2011
Youngest group is most critical about bank communications
Figure 44: Attitudes about financial communications, by age, September 2011
No significant difference across regions
Figure 45: Attitudes about financial communications, by province, September 2011
Newspapers are Main Source of Financial Information
Key points
Media, financial advisors are main sources of information
Figure 46: Information sources for financial decisions, by gender, September 2011
Youngest group goes online for financial news
Figure 47: Information sources for financial decisions, by age, September 2011
Highest earners are more self-reliant when it comes to information
Figure 48: Information sources for financial decisions, by household income, September 2011
Appendix—Trade Associations and Agencies
- Bank of America Corporation
- Bank of Montreal
- Bank of Nova Scotia
- Canada Deposit Insurance Corporation (CDIC)
- Canadian Bankers Association (CBA)
- Canadian Imperial Bank of Commerce
- Canadian Payments Association (CPA)
- Credit Union Central of Canada
- Federal Deposit Insurance Corporation
- Hewitt Associates
- Hudson's Bay Company
- Insurance Bureau of Canada (IBC)
- Interac Association
- International Monetary Fund
- Meridian Credit Union Limited
- National Bank of Canada
- Netflix, Inc.
- The PNC Financial Services Group
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