Environics Research Survey Shows Affluent Canadians Are Worried About Wealth Transfer

A poll conducted by Environics Research in 2018 for IPC Private Wealth revealed that the majority of affluent Canadians are keeping their heirs in the dark on how they plan to pass on their wealth.

The biggest intergenerational wealth transfer in Canadian history is taking place now (Jan, 2018) , but the majority of affluent Canadians are keeping their heirs in the dark on how they plan to pass on their wealth, revealed a new poll for IPC Private Wealth.

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PC Private Wealth’s survey revealed that 58 percent have not discussed instructions for their estate with their heirs, of which 12 percent do not plan to talk about their inheritance plan at all with their beneficiaries. IPC Private Wealth partnered with Environics Research to conduct the poll among 400 Canadians with at least $500,000 in investable assets.

Most wealthy Canadians have not discussed inheritance with their heirs – and some don’t plan to

“The topic of inheritance is an important issue that requires communication to help the next generation succeed in handling new-found wealth,” says Sam Febbraro, Executive Vice President of Investment Planning Counsel. “Children need to understand their parents’ financial objectives for the money that they are leaving behind so they can continue their legacy.”

Toronto-based research firm Strategic Insight projects that approximately $1 trillion in personal wealth will be transferred from one generation to the next in Canada between 2016 and 2026, with roughly 70 percent of that in the form of financial assets.

Amid this vast amount of wealth that will be handed over, 32 percent of affluent Canadians say they are worried about how their heirs will handle their inheritance; and 36 percent say their children don’t have the financial literacy to manage a potential windfall.

Yet, the data revealed that only one in five (19 percent) say they have introduced their children to a financial advisor or have taken them to a planning meeting with the person currently managing their money (18 percent).

“It’s important to have that financial planning conversation between family members when parents are still healthy, and everyone is calm, as opposed to making decisions in a time of crisis when emotions are high,” says Febbraro.

Blended families

The poll revealed that those who are part of a blended family—which includes children of a previous marriage of one or both spouses—are more likely to indicate a lack of trust in their beneficiaries’ ability to manage their wealth (28 percent).

They also share a range of other concerns, such as whom to appoint as the primary beneficiary (15 percent), how to fairly divide assets (13 percent), and the fact that they haven’t spoken openly to their spouse about their estate plans (13 percent). Almost 20 percent of the 400 surveyed were part of blended families.

“There is an opportunity for financial advisors to start that dialogue with their clients on inheritance planning and help educate the next generation on how to steward their finances,” says Paul Wylie, Senior Vice President of Business Development at IPC Private Wealth. “Advisors can play a quarterback role and help clients overcome their fears over their heirs’ ability to manage their wealth.”

Other key findings in the IPC Private Wealth poll include:

One in five (20 per cent) fear that their children will not have anything to pass down to their own children
28 per cent don’t trust their children’s spouses to manage their heirs’ inheritance money
Men (74 per cent) remain the lead decision-maker in their household when it comes to finances and investments
40 per cent want their heirs to have the same financial advisor that they have to help manage their wealth

Learn More About Investment Planning Counsel Inc.

For further information contact:

Evelyn Juan, Environics Communications, Phone: 416-969-2758, ejuan@environicspr.com

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