A report from BMO Economics this morning suggests advisors would be wise to court young Canadians as clients.
According to the report young Canadians between 25 and 34 years old, are, on average, richer than their parents were at the same age.
Referencing Statistics Canada data the study found so-called millennial had a median income of $34,700 in 2011, compared with $33,900 among those in the same age bracket 30 years ago.
"Millennials can buy about two per cent more goods and services than their parents could in the mid-1980s," according to the report. "That doesn't sound like much, but the difference adds up over time." The median net worth of households headed by someone aged 25 to 34 years was $52,000 in 2012, almost double median net worth of $28,752 of a comparable household in 1984.
The catch? Millennials may be richer, but they also have more debt than their parents – 84.4 per cent of households headed by young people owe some form of debt, compared with 82 per cent of the same households in 1984.
The number of millennial who have a mortgage, 85.6 per cent, is also higher than those in the same age group.1984 79.2 per cent of those in the age bracket had a mortgage. The report noted in the last 30 years has been the rising cost of housing. "Although earning slightly more than their parents did in the 1980s, millennial need to pay more to get their foot in the housing door," the report says.
The average house price in 2011 was ten times the median salary of a young family. In 1984, this ratio was only about five times.
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