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A huge influx of affluent migrants is heading to Canada in the coming years – presenting an opportunity for advisors to expand their practices and contribute to the country’s economic growth.
A Henley & Partners global citizens report shows Canada is among the top 10 countries gaining migrant millionaires this year, alongside the United Arab Emirates, Australia, Singapore, Israel, Switzerland, the U.S., Portugal, Greece and New Zealand.
Canada ranks 8th among the top 10 countries for total wealth and as a popular destination for affluent individuals and families considering migration.
It is also 9th globally in terms of the projected influx of high-net-worth individuals this year with an estimated 1,000 more millionaires expected to migrate to Canada in 2022. The affluent are expected to come mainly from the U.K., U.S., France, Vietnam, India, China, Iran, Brazil, and Hong Kong.
Over the coming decade, the report forecasts a 30 per cent increase in the number of high-net-worth people living in Canada, driven largely by the projected performance of the economy, but boosted by this migration trend.
Affluent migrants bring cumulative benefits to their destination countries, the report adds, including increased tax revenue, infrastructure development and investment. The Canadian government notes that one in three Canadian businesses is owned by an immigrant.
Yannick Archambault, partner and national family office leader, at KPMG LLP in Toronto, who was a contributor to the Henley & Partners report, says Canada has always been a popular destination for global citizens due to its high quality of life, safe and politically stable environment, commitment to diversity and human rights, and strong education system.
He notes the Canadian government is looking to welcome a record number of new immigrants between 2022 and 2024 (431,645 permanent residents in 2022, 447,000 in 2023 and 451,000 in 2024) to help drive economic growth.
The influx of capital will create demand for wealth management services in everything from banking, investing, tax and estate planning to real estate and legal, Mr. Archambault says.
“It creates demand for specialists across the wealth management ecosystem and beyond,” he says.
Advisors looking to capture a portion of this growing business segment need to broaden their partnerships with legal and tax professionals to help provide a more holistic client experience. The list includes not only financial services but also immigration, real estate and family office professionals.
Advisors are encouraged to have diverse teams in place to help support clients coming from other countries.
“Having the right expertise and culturally diverse teams gives clients a sense of security about their wealth and future,” says Mr. Archambault, whose family office team works as a liaison with advisors to ensure they have the right strategies and resources in place to service clients moving to Canada from other countries.
“It comes down to planning and quality of advice.”
Mr. Archambault says advisors should approach rising immigration as a chance to expand their practices and presence in their communities.
“If you’re an advisor with a growth mindset and a genuine desire to help people transition to this country successfully, it’s an opportunity to create a real niche,” he says.
- Brenda Bouw, special to the Globe and Mail
Must-reads from Globe Advisor this week
How top advisors spot bargains in volatile markets
Rising interest rates, surging inflation and recession fears have pummelled stock markets this year and spooked investors. Despite the volatility, three veteran financial experts from The Globe and Mail and SHOOK Research’s ranking of Canada’s Top Wealth Advisors are seeing buying opportunities, but disagree on whether to own Canadian banks. Shirley Won takes a look at their sector and stock picks for high-quality names.
Is now the right time to invest in REITs?
Real estate has been making headlines lately for all the wrong reasons. Amid inflation and rising interest rates, virtually all types have fallen in value. But the beaten-up sector remains a key piece of client portfolios and experts say it offers potential buying opportunities for those with a longer runway for growth. Joel Schlesinger looks at the pros and cons of investing in real estate investment trusts and where the demand lies.
Is an advisor qualified to be a life coach?
As money and a person’s relationship to it are fundamental to who they are, financial planning is really a form of life coaching, says an expert. But as financial advisors are increasingly being turned to for guidance through devastating life events, where should they draw the line? Barbara Balfour speaks to three advisors about how they handle helping clients with non-financial matters and maintain their limits when it comes to the scope of their work.
Use of GICs for ‘safety’ grows but are high quality bonds more flexible?
Guaranteed investment certificates (GICs) are suddenly back in fashion as interest rates rise and investors turn to the comfort of safe, simple fixed income options. While GIC rates are a lot better than they have been, some experts say the investments are less flexible than high quality bonds. Bonds also have a tax advantage, in that part of the return, if it is purchased below par, is a capital gain, which is treated more favourably than the interest income of a GIC. Adam Mayers looks at the yields for both products.
What you and your clients need to know
Beware of the myth of the friendly recession
Judging from the market’s behaviour this week, many people seem to be betting on the notion that the economy is headed into a mild downturn that will cool inflation and tame oil prices without doing much damage to corporate earnings or stock prices. In theory, this is possible. In practice, though, it would be unusual to experience such a well-behaved pullback. Ian McGugan reports on the economic landscape compared to previous recessions.
‘Steady eddy’ U.S. dividend stocks for the summer doldrums
Investors may be looking to add more stable names to their portfolios as they enter a period of what’s often considered the calmer months in the markets. Sean Pugliese and Allan Mayer of Wickham Investment Counsel take a conservative approach to analyze low volatility, high dividend paying stocks using their investment philosophy focused on safety and value. Here’s 24 stock picks based on metrics such as beta, dividend yield, debt-to-equity ratios and more.
Subprime borrowers have harder time converting bank loans
Subprime borrowers have had a harder time getting a loan from a bank over the past decade, as federal mortgage rules got tougher. Last year, 71.5 per cent of subprime borrowers in Ontario were able to get a mortgage from a bank or sell their property without defaulting on loan payments or losing their property to foreclosure. That’s down from 83 per cent in 2011, according to a Canada Mortgage and Housing Corp. report. Rachelle Younglai reports on the data and what it means for housing affordability.
- Globe Advisor Staff