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The Great Wealth Transfer – Billions To Change Hands By 2026

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9 minute read

Here comes the boom.

What is ‘The Great Wealth Transfer’? 

 

This term has been coined by several major wealth managers across North America; referring to the tremendous amount of wealth that will be transferred to younger generations over the next decade. Wealth amassed by baby boomers will eventually be passed down to their families or beneficiaries, typically with the aid of a trusted wealth manager or financial advisor. 

Similar in a way to climate change, when we visit some of the data that has been reported in both Canada and the US, this issue seems to be far more pressing than most people are aware. Depending on the publication, the exact amount of wealth that will be transferred is questionable. Cited in Forbes, a report done by the Coldwell Banker Global Luxury® program and WealthEngine claim that $68 Trillion will change hands in the US by 2030.

We spoke with Gwen Becker and Devin St. Louis, two VP’s, Portfolio Managers and Wealth Advisors for RBC Wealth Management, offering their expert insight into the industry and the vast amount of wealth that is changing hands in Canada. 

According to RBC Wealth Management, their numbers in terms of the wealth transfer report $150 billion is set to change hands by 2026. The industry as a whole is at the forefront of this generational shift, whereas a trusted advisor can onboard younger family members to ensure the highest level of support through the process. Gwen offers her perspective:

“Certainly just around the corner; something that we are definitely paying attention to. My practice has always been very relationship-driven. It has been my privilege to advise many of my clients for decades. I have been intentional to welcome and include multiple generations of the same family. I advise grandparents who are now in their 90s, to which the majority of their children are my clients and even beginning to onboard grandchildren.”

This is an example of what is referred to as multi-generational estate planning. Being in the midst of the ‘great transfer of wealth’, this type of planning is crucial for advisors to implement early so they can continue to support the same family in the future. According to the Canadian Financial Capability Survey conducted in 2019, 51% of Canadians over the age of 65 will refer to a financial advisor to seek literacy and support. Contrary to that, Canadians aged 18-34 show that 51% are more likely to use online resources to aid in their financial literacy. 

Devin offers his perspective on how the importance of family legacy plays a role when an advisor poses this question: What is your wealth for?

“If you sat down with a couple 10 years ago, they may say, when I pass away, whatever wealth is left can be distributed evenly amongst our children. That has changed quite a lot now because elder family members are now more concerned about how their wealth is passed on to the next generation. Onboarding grandchildren can ensure that a family legacy that receives their wealth, uses it to benefit their family and their community.”

An important question to consider. Clearly there is a shift in attitude towards having a family legacy live on through younger generations of a family. Evident that having the support of a financial advisor or wealth manager not only ensures the most efficient use of your money and assets but also ensures financial stability for your family in their future.

If we revisit the above study in how a younger demographic is more likely to utilize online resources, interesting how a more digitally inclined audience will be receptive to advisors. Boiling down to how millennials and younger age groups will perceive wealth management if those in that space fail to offer their services through online communication.

Devin agrees that RBC is uniquely positioned for this digital shift:

“interesting that everybody had to transform their processes online through this COVID-19 pandemic. Every company has been forced to step up their technology means, RBC has definitely risen to that occasion. RBC has adapted quickly, improving a great technology base that already existed. I don’t perceive it at this point to be a challenge. I believe we have the right focus. I think it’ll be a good transition for us.”

Gwen continues:

“I do agree that RBC is very well positioned. The younger generations below millennials that would eventually take over some of this wealth carries some challenges. How does that age demographic think, and what are their expectations of wealth management or financial advisors? It is difficult to understand what that generation will expect out of digital advisors. Estate planning matters, and it will always be tied to you knowing the family, it’s a relationship business”

Consider that RBC Wealth Management oversees $1.05 trillion globally under their administration, has over 4,800 professionals to serve their clients and was the recipient of the highest-ranking bank-owned investment brokerage by the 2020 Investment Executive Brokerage Report Card, safe to say their decades of professionalism, expertise and ‘get it done’ attitude speaks for itself.

So, what does this mean for younger members of families who may not understand the field of wealth management?

Starting the conversation early

Whether you are the elder family member who has their financial ‘quarterback’ preparing their estate to change hands or are younger family members who may be the beneficiary of wealth in the near future, starting the conversation amongst family members early is important for the process to be successful. Considering that some possessions have more than just monetary value, but an emotional tie to the family legacy can be a difficult asset to distribute evenly. Of course, it can be a tough conversation to have, it may involve discussing the passing away of a loved one or even setting a plan to cover future expenses. Gwen mentions:

“I encourage my clients to have open conversations with their children while they are alive so that their intentions are clear. Depending on the dynamics of the family, things such as an annual family meeting with a beneficiary can be effective once it’s put in place. If they are not comfortable leading that conversation, bring a trusted adviser to the table to be impartial and logical.”

There is no way to know what ramifications will come of this ‘great transfer of wealth’. It may be that we see the resurgence of a strong bull market in the near future, we may see new tech innovation that we cannot yet grasp or new business investments that continue to disrupt traditional processes. Only time will tell.

For more stories, visit Todayville Calgary

Business

INDIGENOUS CONSULTATION AND ENGAGEMENT AT CANADA’S ENERGY AND UTILITY REGULATORS

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INDIGENOUS CONSULTATION AND ENGAGEMENT AT CANADA’S ENERGY AND UTILITY REGULATORS

CAMPUT is the Association of Canada’s provincial, territorial and federal energy and utility regulators.  CAMPUT’s purpose is to improve energy and utility regulations in Canada and to educate and train our members.  We are highlighting the work of two of our members, the Canadian Nuclear Safety Commission and the Canada Energy Regulator, in the areas of Indigenous consultation and engagement.

The Canadian Nuclear Safety Commission (CNSC) has a broad mandate, including to protect health, safety and security, and the environment, and to disseminate objective scientific, technical and regulatory information to the public, including Indigenous groups.   The CNSC is also an agent of the Crown with the responsibility of ensuring the Duty to Consult is met before making decisions.  The CNSC has explored various means to ensure that Indigenous groups’ voices are heard and integrated into Commission decision-making. The CNSC has also committed to developing on-going, respectful relationships that allow open dialogue in the spirit of reconciliation and trust building.

First, the CNSC focused in-house and put into place policies, practices and processes with an overarching regulatory framework and management system to confirm that CNSC decisions uphold the Honor of the Crown. This included a Regulatory Document (REGDOC 3.2.2, 2016) that sets out the Commission expectations on how proponents play a significant role in working with Indigenous groups to address concerns and mitigate impacts and / or treaty rights, early in design and project proposal stages.

The CNSC also has a dedicated team with expertise in Indigenous consultation and engagement that conducts ongoing engagement with Indigenous groups with interests in nuclear facilities. The long-term goal is to help build relationships and trust and help CNSC staff learn more about the history, rights, interests, and culture of the Indigenous groups. The CNSC continues to work with Indigenous groups to ensure they are provided the opportunity to present their views and give oral presentations at Commission hearings.

To support this participation, the CNSC has put in place a Participant Funding Program that in part, has helped Indigenous groups hire consultants to review technical scientific reports, fund Indigenous Knowledge studies, cover community meeting costs, pay Honoraria for elders, and costs for travel and preparations for hearings. Further, Commission hearings have taken place in communities near facilities to allow easier access by Indigenous groups, and teleconferencing, web access, live streaming and simultaneous translation in Indigenous languages has also been used.

The CNSC acknowledges the importance of working with and integrating Indigenous Knowledge alongside scientific and regulatory information in its assessments and regulatory processes, where appropriate and where authorized by Indigenous communities. Indigenous ways of knowing and cultural context enhance the CNSC’s understanding of potential impacts of projects and strengthens project reviews and regulatory oversight.

The CNSC also runs its own Independent Environmental Monitoring Program (IEMP) that seeks Indigenous participation in taking samples from public areas around nuclear facilities and measuring and analyzing the amount of radiological and hazardous substances in the samples. Following discussions with many Indigenous groups, it was recognized that they could play a key role in identifying country foods and traditional harvest areas and participate as part of the IEMP. Getting meaningful monitoring results to Indigenous communities is a key priority for the CNSC.

The Canada Energy Regulator (CER) welcomes change. In August 2019 we transitioned from the National Energy Board to the Canada Energy Regulator. The CER has been given new legislation and is focused on improvement. Reconciliation with Indigenous Peoples is a pillar of our renewal.

Our legislation directs us to find meaningful ways to engage with Indigenous Peoples. We embrace our new mandate and have woven specific deliverables on reconciliation into every aspect of our work.

Our vision: to transform the way we work with Indigenous Peoples, recognizing their unique cultures, knowledge and histories; and endeavor to reflect a renewed Nation- to-Nation relationship based on the recognition of rights, respect, cooperation and partnership.

We recognize reconciliation is an ongoing process that occurs in the context of evolving Indigenous-Crown relationships. Sitting around the table with Indigenous communities, we are working to find new ways to co-manage regulatory oversight. We recognize the inseparable connection Indigenous Peoples have with the land and the water, and we will work collaboratively to protect them. We are also ensuring we equip the communities with the right skills and support to make the changes we envision a reality.

Indigenous Advisory and Monitoring Committees (IAMC) bring together Indigenous and federal leaders to provide advice to regulators and to monitor the Trans Mountain Expansion and Line pipelines. Members share the goals of safety and protection of environmental and Indigenous interests in the lands and water. Indigenous participation does not equal support or opposition for a project, allowing for better information-sharing within the group. This initiative represents a foundational change in the way the CER and the Federal government work with Indigenous Peoples. It aims to develop an enduring and meaningful relationship for the entire lifecycle of the project. We believe our work with the IAMCs can lead the way on co- management of regulatory oversight activities and has the potential to be applied across the rest of Canada’s energy system.

Here are some other ways we are changing how we work with Indigenous Peoples:

  • We are meeting with Indigenous communities earlier on who may be impacted by projects we regulate to better understand their concerns and share how the CER holds companies accountable for the protection of Indigenous rights and interests.
  • We are adapting our hearing processes to allow for different paths of Indigenous participation. This includes sharing Indigenous Knowledge, allowing for ceremonies, selecting specific locations for the hearing that are convenient to Indigenous participants or elders, and allowing for remote participation if travel is not possible.
  • We are developing a National Indigenous Monitoring Policy so that all CER-regulated infrastructure projects can benefit from Indigenous Knowledge when they are being build and operated.
  • We are training our employees to understand more about Indigenous history, culture and contemporary issues facing Indigenous Peoples in Canada. This training ensures that consideration of Indigenous rights and interests and becomes embedded in our way of working.

Background.  The Canadian Energy Compendium is an annual Energy Council of Canada initiative which provides opportunity for cross-sectoral collaboration on a topic of shared interest across the Canadian energy sector, produced with the support of Canada’s national energy associations and Energy Council of Canada’s members. The stories contributed to the 2019 edition, Indigenous Energy Across Canada, highlight current conversations celebrating Canada’s dynamic energy sector and encouraging its continuous improvement.

Thanks to Todayville for helping us bring our members’ stories of collaboration and innovation to the public.

Click to read a foreward from JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President and CEO, Canadian Council for Aboriginal Business.

JP Gladu, Chief Development and Relations Officer, Steel
River Group; Former President & CEO, Canadian Council for Aboriginal Business

 

Jacob Irving, President of Energy Council of Canada

The Canadian Energy Compendium is an annual initiative by the Energy Council of Canada to provide an opportunity for cross-sectoral collaboration and discussion on current topics in Canada’s energy sector.  The 2020 Canadian Energy Compendium: Innovations in Energy Efficiency is due to be released November 2020.

Click to read comments about this series from Jacob Irving, President of the Energy Council of Canada.

COASTAL GASLINK PIPELINE PROJECT SETS NEW STANDARD WITH UNPRECEDENTED INDIGENOUS SUPPORT AND PARTICIPATION

Hydro-Québec takes partnerships, environmental measures and sharing of wealth to new levels

Read more on Todayville.

 

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Alberta

Enbridge wins approval to restart east leg of Line 5 pipeline through Great Lakes

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CALGARY — Enbridge Inc. says it will restart the east segment of Line 5 in the Straits of Mackinac after winning approval from the U.S. Pipeline and Hazardous Materials Safety Administration and the Michigan Circuit Court.

The Calgary-based company shut down both legs of the pipeline in June after noticing a disturbance to an underwater anchor supporting the eastern line.

The west leg was restarted, then ordered shut down by a judge at the request of Michigan state Attorney General Dana Nessel, then started again, but the east leg has remained closed.

Line 5 moves crude oil and propane from Wisconsin to Sarnia, Ont., passing through parts of Michigan’s upper and lower peninsulas. A 6.4-kilometre-long segment divides into two pipes that cross the bottom of the Straits of Mackinac, which connects Great Lakes Huron and Michigan.

Vern Yu, Enbridge vice-president of liquids pipelines, says the decision to allow the restart is good news for Michigan residents who depend on the energy Line 5 delivers.

Enbridge says it has been assured by the pipeline administration that there are no integrity issues with Line 5.

This report by The Canadian Press was first published Sept. 9, 2020.

Companies in this story: (TSX:ENB)

The Canadian Press

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