ISS Market Intelligence report forecasts $11 trillion by 2032, with opportunities for wealth professionals
Canadian household wealth will continue to see strong growth over the next decade, although at a slightly slower pace than the previous decade.
A new report from ISS Market Intelligence forecasts that investable assets will grow from $6.2 trillion at the end of 2022 to $11.2 trillion by the end of 2032 with a projected 10-year CGAR of 6.2%.
This is down from the 7.4% rate of the previous ten years which was skewed by the exceptional gains seen in 2020 and 2021 thanks to market performance and the savings boom which increased aggregate savings of Canadian households by $1.9 billion between the end of 2019 to the end of 2022.
The 16th edition of the Household Balance Sheet Report considers the impact of the pandemic on Canadians’ finances and the behaviours that emerged that may endure.
“On the financial front, the post-pandemic world greeted Canadian households with a challenging macroeconomic and market backdrop. With inflation eating into disposable dollars available for savings, and the cost of servicing debt powerfully on the rise—what we term as the Big Squeeze—Canadian households are facing competing demands for their finite financial resources,” said Goshka Folda, managing director, global head of research for ISS MI. “The net result is an expected slowdown in the financial wealth creation pattern for the household sector in the decade ahead, exacerbated by the progression of the final cohort of the vast baby-boomer generation into the retirement phase.”
The report also looks at the generational spread of wealth held by Canadian households.
It predicts a significant shift with boomers continuing to control a substantial share in the next decade, but millennials and Gen Zs showing increasing dominance. Gen X are expected to accumulate almost half of the net inheritance flows over the next decade, which could be worth $400 billion.
Wealth professionals’ opportunities
The emerging picture for Canadian wealth provides opportunities for wealth professionals who adapt to market demands.
The report says that adaptable retirement solutions are increasingly sought, and this will intensify with
wealth held by those 55 years and older projected to exceed C$7.0 trillion by 2032, representing 63% of the overall wealth of Canadian households. Retirement planners can benefit from the growth in both cohort size and wealth volume.
Meanwhile, wealth technology will continue to grow in importance as millennials, and in particular Gen Zs, begin their investing journeys with newfound inheritances and gravitate towards digital investment channels.
The report also forecasts that 80% of the household wealth in 2032 will be held by those with at least $1 million in investable assets with almost half a million households joining this group over the next decade.
