08/07/22

CANADA: Rise in wealthy migrants to create demand for wealth management services, according to report.

As published on theglobeandmail.com, Friday 8 July, 2022.

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 KMPG 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.