Three in four say building wealth is more difficult now than in previous generations
Toronto, ON (July 31, 2019) – Despite higher salaries, almost half (48%) of Canadians in high-income households say they are not as wealthy as they expected to be at this stage of their life. When asked what net worth they would need to feel wealthy where they live, the average figure was CAD $1.3 million with Ontario residents citing the highest figure at $1.5 million and those in the Atlantic and Quebec regions citing the lowest figures at $898,731 and $925,738 respectively. These insights are from a new Ipsos survey sponsored by RBC Wealth Management.
“Regardless of income, many Canadians find themselves behind on their wealth goals as many of the traditional ways we build wealth have changed over the generations,” says Tony Maiorino, Head, RBC Wealth Management Services. “With the added backdrop of market uncertainty, clients are voicing their concerns and looking for support using non-traditional methods of meeting their wealth goals.”
Building wealth is more difficult than in previous generations
Three quarters of survey respondents agree building wealth is more difficult than in previous generations, with respondents in Ontario (81%) and Alberta (80%) most likely to agree and those in Quebec (66%) least likely to agree. When asked why they think they are not as wealthy as they expected to be, most respondents attributed the gap to the rising cost of living (60%) and unexpected expenses (51%). Other factors include: cost of raising children (40%), expensive home prices (30%), and salaries that are lower than expected (28%). Respondents in Alberta credit higher cost of living as the primary barrier to wealth creation, whereas those in the Atlantic and Quebec regions were least likely to select that reason.
High-income Canadians are optimistic they will meet their goals, yet find wealth management topics complicated
Of the 48% of respondents who are not as wealthy as they thought they would be, almost three quarters (73%) believe they will reach their financial goals before retirement. This optimism seems to be at odds with their confidence when it comes to aspects of wealth management topics, with the majority agreeing the following topics are challenging:
- Knowing which information to trust (78%)
- Staying on top of what’s happening in the financial markets (76%)
- Using tax strategies to minimize taxes (71%)
- Ensuring they don’t outlive their assets during retirement (70%)
- Understanding the use of insurance in a financial plan (66%)
As well, nearly 8 in 10 higher income Canadians find it challenging to know both which information to trust and to stay on top of what’s happening in the financial markets, and three quarters said they value the expertise of a financial expert.
“Things like tax strategies, insurance and retirement planning play a key role in building wealth today but I’m not surprised that so many respondents find them challenging. The financial landscape is always evolving and people have less time to research and learn about wealth management topics,” says Howard Kabot, Vice-President, Financial Planning, RBC Wealth Management Services. “Most clients need to explore a variety of tactics through a holistic lens to build and preserve wealth.”
1. High income is defined as a minimum household income of CAD $100,000.
2. Wealth defined as all assets, savings, investments, real estate, etc.
3. In partnership with Ipsos, RBC Wealth Management surveyed Canadians aged 30-65 with a minimum household income of $100,000.
About RBC Wealth Management
RBC Wealth Management is one of the world’s top five largest wealth managers*. RBC Wealth Management directly serves affluent, high net worth and ultra high net worth clients globally with a full suite of banking, investment, trust and other wealth management solutions, from our key operational hubs in Canada, the United States, the British Isles, and Asia. The business also provides asset management products and services directly and through RBC and third party distributors to institutional and individual clients, through its RBC Global Asset Management business (which includes BlueBay Asset Management). RBC Wealth Management has C$1.05 trillion of assets under administration, C$727 billion of assets under management and more than 4,800 financial consultants, advisors, private bankers, and trust officers. For more information, please visit www.rbcwealthmanagement.com.
* Scorpio Partnership Global Private Banking KPI Benchmark 2018. In the United States, securities are offered through RBC Wealth Management, a division of RBC Capital Markets, LLC, a wholly owned subsidiary of Royal Bank of Canada. Member NYSE/FINRA/SIPC.
About RBC Insurance
RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, one of North America’s leading diversified financial services companies. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with approximately 2,900 employees who serve more than five million clients globally. For more information, please visit rbcinsurance.com.
Source: RBC Insurance via RBC Corporate CommunicationsTags: financial challenges, RBC Insurance, retirement planning & savings