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Description

Description

“In the short-term, affluent consumer preferences shift to safer fixed income investments such as bonds, savings accounts and GICs. But in the middle to longer-term, relatively normal levels expected to resume, potential with an increase in use of financial advisors as affluent investors are more likely to value expert advice.”
– Sanjay Sharma, Senior Financial Services Analyst

This Report will cover the following areas:

  • The impact of COVID-19 on consumer behaviour and the affluent investment market
  • How the affluent investment market will fare post-COVID-19
  • Consumer attitudes and behaviour related to affluent investors (those with over $500,000 in investments) and millionaires (those with over $1 million in investments).
  • Product ownership, type of investment firm used for wealth management, investment activities, amount of investments and segmentation by amounts owned, attitudes related to financial advice and investing.

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definitions
          • Income
            • Glossary
            • Executive Summary

                • Impact of COVID-19 on investing
                  • Some 4% of Canadians have at least a million in investments
                    • Figure 1: Breakdown of Investments (excluding cryptocurrencies), January 2020
                  • Around half of affluent investors own fixed income investments and stocks
                    • Figure 2: Ownership of products/accounts, by level of investments, January 2020
                  • Affluent women are less comfortable, what can the industry do?
                    • Figure 3: General attitudes about investing, affluent man vs affluent women, January 2020
                  • Younger are more socially conscious
                    • Figure 4: General attitudes and behaviours about investing (select), 18-44s vs Over-45s, January 2020
                  • Affluent women more likely to use robo-advisors
                    • What it means
                    • The Impact of COVID-19 on Affluent Investing

                      • Summary
                        • Figure 5: Short, medium and longer term impact of COVID-19 on affluent investing, April 2020
                      • Opportunities and Threats
                        • A temporary flight to safer investments is inevitable...
                          • …and the crisis will increase the popularity of ESG investing
                            • An emphasis on community and mutual support
                              • Figure 6: Vancity Facebook post, March 2020
                            • Playing to their confidence as investors
                              • Figure 7: Desjardins Online Brokerage mobile ad, May 2020
                              • Figure 8: Fisher Investments Canada online ad, May 2020
                            • Market impact of COVID-19
                              • Fewer in-person interactions as consumers move online
                                • Mutual funds face flood of redemptions, some real estate funds halt redemptions
                                  • Shifts in consumer behaviour
                                    • Affluent investors more likely to keep their investments in Canada
                                      • How the crisis will affect key consumer segments
                                        • Women are more likely to cut spending drastically
                                          • Opportunity for robo-advisors to target affluent women
                                            • Younger affluent Canadians may be experiencing a cash surplus
                                              • How a COVID-19 recession will impact consumer finances
                                                • Unemployment is a concern as GDP drops
                                                  • Economic update
                                                    • Moving from 2019, perception of financial health was already softening
                                                      • Figure 9: Perception of financial health, January/February 2015-20
                                                    • COVID-19: Canadian context
                                                    • The Market – What You Need to Know

                                                      • Financial market impact of COVID-19
                                                        • Affluent market segment perspective: doctors
                                                          • New deferred annuities to provide greater income security for retirees
                                                            • Deferred sales charges to be banned
                                                              • Trailer fees also on the “ban radar”
                                                              • What’s New?

                                                                • Financial market impact of COVID-19
                                                                  • Figure 10: Worry about impact of COVID-19 on one’s lifestyle, March 26 – April 1, 2020
                                                                • Affluent market segment perspective: doctors
                                                                  • Background
                                                                    • Doctors vs other affluent clients
                                                                      • Competition
                                                                        • New deferred annuities to provide greater income security for retirees
                                                                          • Deferred sales charges to be banned
                                                                            • Trailer fees also on the “ban radar”
                                                                            • Key Players – What You Need to Know

                                                                              • Partnerships and acquisitions
                                                                                • Legal and regulatory news
                                                                                  • Marketing campaigns
                                                                                  • Industry Developments and Innovations

                                                                                    • Subsidiary of Purpose Financial buying Wealthsimple’s financial-advisor business
                                                                                      • Hub Financial partners with Nest Wealth
                                                                                        • Discount brokerages hit with class-action lawsuit
                                                                                          • Handing back control of PACE credit union to members
                                                                                            • Taking over stock market trading supervision in Canada
                                                                                              • Mutual funds face flood of redemptions, some real estate funds halt redemptions
                                                                                              • Marketing Campaigns

                                                                                                • Manulife puts disciplined advice at the forefront
                                                                                                  • Figure 11: Manulife Investment Management - The Farm, February 2020
                                                                                                • BMO breaks biases
                                                                                                  • Figure 12: BMO | Jane’s Story, March 2020
                                                                                                • Ellevest (US)
                                                                                                  • Figure 13: Retirement in Real Life: Irene Buchman & Kayla Gluck, January 2019
                                                                                              • The Consumer – What You Need to Know

                                                                                                • Some 4% of Canadians have more than a million in investments
                                                                                                  • Around half of affluent investors own fixed income investments and stocks
                                                                                                    • Retail banks most favoured for investing
                                                                                                      • Majority of investors are risk averse, less so among affluent
                                                                                                        • Affluent women more likely to outsource investment decision making
                                                                                                          • Affluent women are less comfortable interacting with the investment industry
                                                                                                          • Affluence & Product Ownership

                                                                                                            • Some 4% of Canadians have at least a million in investments
                                                                                                              • Figure 14: Breakdown of Investments (excluding cryptocurrencies), January 2020
                                                                                                              • Figure 15: “Who are the affluent?” by age and gender, January 2020
                                                                                                            • Some 11% have a net worth of more than a million
                                                                                                              • Figure 16: Breakdown of net worth (including real estate and pensions), January 2020
                                                                                                            • Half of Canadians have a TFSA, majority have a savings account
                                                                                                              • Figure 17: Ownership of products/accounts, January 2020
                                                                                                            • Around half of affluent investors own fixed income investments and stocks
                                                                                                                • Figure 18: Ownership of products/accounts, by level of investments, January 2020
                                                                                                              • Affluent men have a higher ownership of stocks and ETFs
                                                                                                                • Figure 19: Ownership of products/accounts (select), affluent men vs affluent women, January 2020
                                                                                                            • Type of Financial Institution Used

                                                                                                              • Retail banks most favoured for investing
                                                                                                                  • Figure 20: Type of FI used for investing, January 2020
                                                                                                                • Those with $500k-$1 million in investments are key clients for independent investment companies
                                                                                                                  • …while millionaires are key clients for bank/credit union owned wealth management subsidiaries
                                                                                                                    • Figure 21: Type of FI used for investing, by amount of investments, January 2020
                                                                                                                  • Discount brokerage use trends higher among affluent, Chinese Canadians and men
                                                                                                                  • Investing Activities

                                                                                                                    • Around half have performed one of the selected investing activities
                                                                                                                      • Figure 22: Investing activities performed, January 2020
                                                                                                                    • Passive investing and using investment software holds more appeal to affluent men
                                                                                                                      • Figure 23: Investing activities performed (select), by amount of investments, January 2020
                                                                                                                    • Estate planning and charitable giving are more important for affluent
                                                                                                                      • Affluent women more likely to use robo-advisors and create a financial plan
                                                                                                                        • Figure 24: Investing activities performed, (Select), affluent men vs affluent women, January 2020
                                                                                                                    • Attitudes towards Investing

                                                                                                                      • Majority find investing complicated and interesting
                                                                                                                        • Figure 25: Attitudes towards investing, January 2020
                                                                                                                      • Majority of investors are risk averse, relatively less among affluent
                                                                                                                        • Figure 26: Attitudes towards investing (% agree), affluent vs overall, January 2020
                                                                                                                      • Majority feel that investing in property is safer than the stock market
                                                                                                                        • Affluent women are more risk averse
                                                                                                                        • Financial Advice

                                                                                                                          • Awareness about financial advice is fairly high
                                                                                                                            • Figure 27: Attitudes related to financial advice, January 2020
                                                                                                                          • Younger consumers are strongly open to digital communication with their financial advisor
                                                                                                                            • Figure 28: Attitudes related to financial advice (select), 18-44s vs over-45s, January 2020
                                                                                                                          • Affluent women more likely to outsource investment decision making to a financial advisor
                                                                                                                            • Figure 29: Attitudes related to financial advice (select), affluent vs overall, January 2020
                                                                                                                        • Investing Strategies & General Attitudes

                                                                                                                          • Only one in four comfortable interacting with the investment industry
                                                                                                                            • Figure 30: General attitudes and behaviours about investing, January 2020
                                                                                                                          • Younger are more socially conscious
                                                                                                                            • Figure 31: General attitudes and behaviours about investing (select), 18-44s vs over-45s, January 2020
                                                                                                                          • Affluent women are less comfortable, what can the industry do?
                                                                                                                            • Figure 32: General attitudes about investing (select), affluent men vs affluent women, January 2020
                                                                                                                          • Affluent investors more likely to keep their investments in Canada
                                                                                                                            • Figure 33: General attitudes and behaviours about investing (select), affluent vs overall, January 2020
                                                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                                                          • Data sources
                                                                                                                            • Consumer survey data
                                                                                                                              • Abbreviations and terms

                                                                                                                              About the report

                                                                                                                              This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                              • The Consumer

                                                                                                                                What They Want. Why They Want It.

                                                                                                                              • The Competitors

                                                                                                                                Who’s Winning. How To Stay Ahead.

                                                                                                                              • The Market

                                                                                                                                Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                              • The Innovations

                                                                                                                                New Ideas. New Products. New Potential.

                                                                                                                              • The Opportunities

                                                                                                                                Where The White Space Is. How To Make It Yours.

                                                                                                                              • The Trends

                                                                                                                                What’s Shaping Demand – Today And Tomorrow.

                                                                                                                              Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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