The pandemic has caused many Canadians to reassess how they plan to transfer their wealth, according to a new report from IG Private Wealth Management.
The report, Family Matters: A report on affluent Canadians and the transfer of wealth, found that more than three-quarters (77%) of high-net-worth (HNW) Canadians (those who have at least $1 million in investable assets) said they wanted to see their child “get ahead.”
A significant majority (86%) of parents expressed both a desire and a responsibility to provide financial support for children attending post-secondary education, with the average amount totalling $35,662, the report found.
Many parents (72%) also expressed a willingness to provide capital to help their children purchase a first home. The survey revealed that support for a first home purchase was highest in British Columbia (33%) and Ontario (30%) — the provinces with the most expensive property markets in Canada.
Another area where HNW parents may offer financial support is funding new business ventures, with 30% of HNW households saying they have provided, or would be willing to provide, some capital should a son or daughter wish to start a business.
“Increasingly, Canadian families are viewing wealth created by older generations as family assets, and as means to help their children and grandchildren enjoy a more secure financial future,” said Damon Murchison, president and CEO, IG Wealth Management in a statement.
Conversely, although most HNW households displayed a high level of generosity, some respondents expressed concern that giving to their children might go too far or that “they wished not to over-burden the younger generations with wealth.”
The report also revealed that while 79% of respondents have a financial advisor, making a financial gift to one or more children had not been identified in a family financial plan.
The generosity of HNW Canadians also extends beyond family.
According to the report, two-thirds of affluent households said they currently donate to charitable causes on a regular basis, while one-in-five (20%) said their estate plans include gifts to philanthropic organizations.
“The last two years upended the lives of so many and led Canadians to consider charitable giving, not just as a good thing to do but as the right thing to do,” said Murchison.
The report was conducted by Pollara Strategic Insights between Aug. 5 and 12, surveying an online sample of 510 Canadians with investable assets of $1 million or more. Online surveys can’t be assigned a margin of error because they don’t randomly sample the population.