Intergenerational wealth transfer in Canada

Myth 1: Millenials will mostly inherit it

The reality looks more nuanced:

› Canada’s average life expectancy has climbed to 82 years3

› the number of people aged 85 and older is growing four times faster than the population as a whole4

As a result, it looks like the next generation, namely their children aged 50 and older, will inherit a good share of that wealth. The good news is that a large proportion of these future heirs already do business with financial advisors. For instance, 65% of Ontario investors aged 45 or more seek professional financial advice5.

Myth 2: Inheritors will do business with you

These research findings seem to suggest this isn’t necessarily the case1:

For an advisor, establishing a relationship with the inheritors is therefore key to ensure both a successful wealth transfer and business development.

Multigenerational potential

Here are some strategic questions to start talking inheritance planning and initiate a generational shift in clientele:

› Have your clients talked to you and their heirs about their inheritance plan? Does it include their financial assets?

› Are they aware of the tax implications of their inheritances?

› Are your clients considering giving their children a living inheritance? If so, do they retain sufficient assets to enjoy their retirement or face a market slide?

› What do beneficiaries plan to do with their inheritance?

Your expertise will provide them with quality advice, help cement your relationship and position yourself for the next generation.

Sources:

1. Investor Economics Household Balance Sheet Report—Canada 2017, Strategic Insight
2. Health-adjusted life expectancy in Canada, Statistics Canada
3. Life expectancy at birth (2016), World Bank
4. A portrait of the population aged 85 and older in 2016 in Canada, Statistics Canada
5. Investing as We Age—Key Highlights, p. 12, Ontario Securities Commission, September 26, 2017