Mom and Dad will be rolling over in their graves: Rich Canadians fear kids will blow their inheritances
- The rich fret about their heirs
- Markets at a glance
- Economy rebounds in November
- What to expect from the Fed
You've shamed the family
Reading the latest survey from IPC Securities Corp., one can only assume that a lot of rich parents will be rolling over in their graves when they get there.
Many wealthy Canadians are worried their kids could blow their inheritances, don't have the financial smarts to manage a windfall, or have married someone they don't trust. Indeed, many haven't even told their heirs how to handle the estate.
(I'm using heirs and children interchangeably here. But maybe that's because I for sure was a kid, but hardly rarefied enough to call myself an heir to anything, with the possible exception of my dad's polyester leisure suits.)
"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," Sam Febbraro, executive vice president of Investment Planning Counsel, the parent of IPC Securities, said in releasing details of the survey of high net worth Canadians.
(I don't know about rich folks, but my family was in a constant state of crisis with emotions always running high.)
The results of the survey - it was done by IPC and Environics Research among 400 people with at least $500,000 in investable assets - are actuallly quite fascinating in that they suggest a high level of mistrust.
Some survey findings:
You've shamed the family: 32 per cent fret about how their heirs will handle the money.
You should have studied more: 36 per cent don't think their kids have the financial know-how needed.
No, you can't come to my office: Just 19 per cent have introduced their kids to a financial advisor.
I never liked that boy: 28 per cent don't trust a child's spouse to manage the windfall.
So when are you going to make me a grandparent? 20 per cent worry that children won't have money to pass on to their own kids.
(Okay, my parents would have been right on that one.)
You don't look like the rest of us, you must have been adopted: 28 per cent of "blended" families, with kids from an earlier marriage, are "more likely to indicate a lack of trust in their beneficiaries' ability to manage their wealth."
Mom always liked you best: 15 per cent of that group worry about who should be the primary beneficiary.
How come she got that: 13 per cent of that group also aren't sure how to divide their wealth fairly.
- Canada’s millionaires club bulges (but many don’t want to share when they die)
- Follow Globe Investor (if you expect an inheritance)
Markets at a glance
- Follow our Inside the Market
- Ian McGugan: Why bond yields suddenly have stock investors running for the exit
Economy expands 0.4 per cent
Canada's economy rebounded in November, on a fairly broad-based basis.
Gross domestic product expanded 0.4 per cent, Statistics Canada said today, with goods-producing sectors gaining 0.8 per cent and the services side 0.3 per cent.
Notable was the output from manufacturing, up 1.8 per cent for the fattest monthly rise since early 2014.
Important, too, was that the real estate industry was still chalking up gains, with agents and brokers enjoying a 4-per-cent rise ahead of the new mortgage rules that took effect early this month.
Note, too, that "the level of activity of this subsector remains below its March, 2017, level, following provincial government changes to housing regulations in Ontario that came into effect in April of that year," Statistics Canada said.
"November was a warm month as far as temperature is concerned, and was hot for Canadian output, as well," said Nick Exarhos of CIBC World Markets, noting November's expansion was was the fastest in half a year and "makes up slightly for a string of more disappointing readings on overall growth."
The economy, he added, now has to deal with higher interest rates and a stronger Canadian dollar.
"Still, the strong pace to November growth only keeps us in the 2-per-cent or so range for Q4, slightly under the unchanged 2.5-per-cent forecast from the [Bank of Canada]," Mr. Exarhos said.
Over all, the federal agency cited "widespread growth across industries as 17 of 20 industrial sectors increased."
What to watch for today
The Federal Reserve releases its decision this afternoon.
Economists, though, expect no rate changed until the March meeting of the Federal Open Market Committee, the U.S. central bank's policy-setting panel.
"With markets already pricing a March rate hike as certain, and incoming data largely in line with the FOMC's December outlook, we can hit the snooze button into the March meeting," Morgan Stanley said in a lookahead to the decision.
This will also mark the last meeting for Fed chair Janet Yellen, who's being succeeded at the helm by Jerome Powell, President Donald Trump's choice.
There are other changes, too.
"The voting members in the FOMC take on a more hawkish hue this year, given the annual rotation of regional presidents and with dovish-leaning Janet Yellen departing," said Bank of Montreal deputy chief economist Michael Gregory.
"In turn, we judge the Fed is now more likely to react to rising (net) inflation risks, let alone to the realization of higher inflation readings."