Wealthy Canadians seeking full range of advice services

More than 80% of Canada’s ultra high-net-worth individuals use external advisors to manage their money and most maintain as many as half-a-dozen professional financial relationships, a new survey indicates.

The study, conducted by Sensus Research on behalf of the T. Stenner Group of CIBC Wood Gundy, a Vancouver-based private family office, defines ultra high-net-worth (UHNW) as those with total household assets of more than $10 million, including real estate, investments and business interests.

Fully 95% of the 165 wealthy individuals questioned for the survey use an accountant, by far the most popular financial professional cited. But the majority of respondents also maintained relationships with an insurance broker (79%), an investment advisor (74%), a private banker or stock broker/brokerage firm (68%), and a tax lawyer (61%).

More than half of those surveyed believe their average compounded pre-tax rate of return on investments over the next five years will be between 7% and 8%. About 10% of respondents were more optimistic, expecting rates of return to top 11%.

When asked which financial sector they would prefer to invest 20% of their net worth in, 49% cited the stock market. Twelve percent preferred real estate, while 10% said they would be confident investing in principal protected notes, “denoting a typically higher sophistication level in this segment,” the survey states. Private equity, hedge funds and bonds each garnered 8% support.

In terms of investment objectives, 49% said their main goal was to “take care of their family and ensure that their financial goals and needs are met.”

Similarly, nearly half of respondents said that providing security for their family was the most important aspect of wealth. Long-term security and peace of mind were the top-ranked benefits of wealth, sustaining current lifestyle was the main worry, while the major challenge was “maintaining a strong work ethic and sense of values in my family.”

Although charitable giving was low on the list of priorities, the UHNW are generally quite philanthropic, with 69% donating more than $100,000 to charities in the past year. Children’s charities were the most popular, followed by the arts, then religious organizations.

The bulk of respondents were between the ages of 40 and 55, and only 7% were under the age of 40, suggesting that it takes time and experience to accumulate this kind of wealth, the study says. About three-quarters of respondents were male. About half said they were still working while only 19% considered themselves to be fully retired.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com