Published : Dec-2018
No. of Pages : 39
1. EXECUTIVE SUMMARY 1
1.1. Economic improvements steered growth in the Canadian wealth market 1
1.2. Key findings 1
1.3. Critical success factors 1
2. THE CANADIAN WEALTH MARKET GREW IN 2017 DUE TO POSITIVE ECONOMIC GROWTH 6
2.1. Introduction 6
2.2. Canadian wealth market growth will ease in future years 6
2.2.1. 2017 saw positive growth in the Canadian economy 6
2.2.2. Over a quarter of the Canadian population are affluent 7
2.2.3. The proportion of liquid assets held by HNW individuals increased by 0.5pp in 2017 8
2.2.4. Nearly 17% of HNW wealth is held in illiquid assets 9
2.3. Offshore investments account for 15% of Canadian HNW assets 11
2.3.1. Geographic diversification drives Canadian residents to invest offshore 11
2.3.2. Canada is becoming stricter on compliance and transparency 12
3. MUTUAL FUNDS ACCOUNT FOR THE LARGEST SHARE OF RETAIL INVESTORS' PORTFOLIOS 14
3.1. Introduction 14
3.2. All asset classes will continue to grow and mutual funds will continue to form the largest proportion 14
3.2.1. Positive stock market performance will continue to support growth 15
3.3. Mutual funds and equities growth rates follow trends on the stock market 16
3.3.1. The TSX is dominated by financial services and industrial products and services 16
3.3.2. Equity investors remain cautious 17
3.3.3. Mutual funds are the leaders of growth 18
3.4. Deposits experienced slight growth in 2017 20
3.4.1. Despite rising interest rates, deposit balances experienced the slowest growth in years 20
3.5. Slow but steady growth is the outlook for bonds 21
3.5.1. Unlike many countries, Canadian bonds continue to grow 21
4. THE CANADIAN OFFSHORE MARKET LOOKS PROMISING 23
4.1. Introduction 23
4.2. Equities are the most popular asset for non-residents 23
5. APPENDIX 25
5.1. Abbreviations and acronyms 25
5.2. Supplementary data 25
5.3. Definitions 29
5.3.1. Affluent 29
5.3.2. Domicile 29
5.3.3. Double taxation convention 29
5.3.4. Emerging affluent 29
5.3.5. FATCA 29
5.3.6. HNW 30
5.3.7. Individual 30
5.3.8. Liquid assets 30
5.3.9. Mass affluent 31
5.3.10. Mass market 31
5.3.11. Onshore 31
5.3.12. Residency 31
5.3.13. Exchange of information 31
5.3.14. TIEAs 32
5.4. Methodology 32
5.4.1. 2018 Global Wealth Managers Survey 32
5.4.2. Retail Investments Analytics 33
5.4.3. Global Wealth Model 34
5.4.4. Exchange rates 36
5.5. Bibliography 36
5.6. Further Reading 37
List of Tables
Table 1: Number of adults in Canada segmented by asset band (000s), 2012-17 25
Table 2: Number of adults in Canada segmented by asset band (000s), 2018-22f 26
Table 3: Retail liquid assets in Canada segmented by asset band ($m), 2012-2017 27
Table 4: Retail liquid assets in Canada segmented by asset band ($m), 2018-22f 28
List of Figures
Figure 1: 27% of the Canadian population is affluent 8
Figure 2: Affluent individuals account for 80% of total liquid assets 9
Figure 3: 16.5% of HNW wealth was held in illiquid assets in 2017 10
Figure 4: Alternative investments are expected to increase the most in demand 11
Figure 5: Offshore investments by Canadian residents are below the global average 12
Figure 6: Canada has adopted the OECD's Common Reporting Standard 13
Figure 7: Mutual funds are now the largest asset class 15
Figure 8: Mutual funds have the largest retail balance 16
Figure 9: The financial services sector has the largest stock market weighting 17
Figure 10: Ongoing positive stock market performance has helped boost equities 18
Figure 11: Positive stock market performance boosted mutual funds in 2017 19
Figure 12: Deposit inflows decreased in 2017 21
Figure 13: Bonds will increase at a more sedate pace 22
Figure 14: Deposits saw the largest growth among non-resident retail investors 24
Figure 15: Example of a four-input forecasting process 34
