Household assets to approach $10 trillion by 2030

Canadian households will control almost $10 trillion in investable assets by 2030, according to a new report from Investor Economics Inc. (IEI).

In its latest “household balance sheet” report, the Toronto-based industry research firm forecasted that financial wealth will surge from $5.6 trillion at the end of 2020 to $9.6 trillion by the end of 2030.

The forecast reflects a projected 10-year compound annual growth rate of 5.6%, down from 7.1% over the past 10 years, including “two years of extraordinary gains” in 2019 and 2020, the firm said in a release.

“Strong market contribution and pandemic-intensified savings inflows swelled the financial pot of Canadian households by more than $1.1 trillion between the end of 2018 and 2020,” IEI said.

Looking ahead, the firm predicts that the composition of household wealth will also shift along with the country’s demographics over the next 10 years.

“By the end of 2030, the baby-boomer cohort will have fully transitioned into the 65-year-old or greater age bracket. While continuing to hold a commanding household wallet-share, at nearly half of Canada’s household financial wealth, the senior segment’s growth will continue to moderate,” it said.

At the same time, it projects that the financial wealth of millennials will grow at triple the rate of baby boomers, and “generation Z is expected to gain nearly $300 billion in financial wealth over the next decade – starting with very few assets to their name,” it said.

At the same time, generation X is expected to inherit over $450 billion in the next decade.

By 2030, IEI says that those over age 55 will account for 67% of total household wealth — over $6.4-trillion worth.

And Investor Economics predicts that “nearly half a million households will join the ranks of the financially affluent” over the next 10 years.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.