High-net worth Canadians – those with investible assets of $1 million or more – believe they are more financially secure today than they were before the 2008 recession, a new study reveals. But Canada’s wealthy don’t feel as secure as their American counterparts.
The study, commissioned by BMO Harris Private Banking, study found that 54% of affluent Canadians feel they are better off now than they were before September 2008, with only 11% saying they are worse off and 36% reporting that their financial situation is unchanged. This compares with 61% of high-net worth Americans reporting they are better off and only 7% stating they are worse off.
The study also revealed that 47% of high-net worth Canadians expect the country’s economy to improve in 2013; meanwhile 61 % are optimistic about what the future holds for the U.S., 55% expect to see gains in Asia but just 19% expect the financial situation in Europe to improve.
Interestingly, affluent Americans are more optimistic about what the future holds for the Canadian economy than their neighbours up north, with 61% stating that they expect increased prosperity for Canada.
"High-net worth Canadians clearly feel they have bounced back well from the 2008 downturn and are fairly upbeat about what the future has in store for Canada's economy," said Alex Dousmanis-Curtis, head of BMO Harris Private Banking. "However, we're also hearing from many of our clients that they remain somewhat concerned about global market fluctuations. They want to work with us to insulate their wealth - as best as possible - against a downturn."
The study also found that 86% of high-net worth Canadians say they are quite comfortable with their current savings and investment plan: 70% expect stocks to generate the most solid returns over the next five years, well ahead of real estate at 39%, bonds at 24% and cash at 19%.
Canada's affluent are most bullish about the financial (76%) and energy (75%) sectors but are apprehensive about the manufacturing (30%). This differs from American counterparts who feel more positive about the technology/IT (80% Americans vs. 64% Canadians) and manufacturing (50 vs. 30%) sectors.
Additionally, the study shows that affluent Canadians are returning to pre-recession spending levels. They are currently spending more than, or the same as, they did prior to September 2008 in a variety of areas, including: entertainment and leisure (89%), travel (86%), club memberships (78%), clothing and accessories (75%) and collections and hobbies (72%).
"Increased spending shows confidence in the economy and helps spur economic activity. We're delighted to see such a high percentage of high-net worth Canadians opening up their wallets," said Dousmanis-Curtis.
The online survey was conducted by Pollara between March 28th and April 11th, 2013 with a sample of 305 Canadians and 482 Americans with at least $1 million in investable assets. The margin of error for a probability sample of this size is +/- 5.6%, 19 times out of 20 for Canadian results and +/- 4.5%, 19 times out of 20 for US results.