The Great Wealth Transfer – Billions To Change Hands By 2026

Scott McGinn

Published

1 week ago

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

Related Topics:feature RBC wealth transfer

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“…(Alberta’s) been booming so long that people think it’s our time to suffer…”

Published on August 7, 2020

Heidi McKillop

Producer Notes:

What an emotional piece of video here shared by Heidi, and the links between layoffs and suicide in Alberta. The data is very clear that there’s a direct correlation and an increase in suicide rates and what’s going on in our world gasps History and dad’s especially fathers can be under tremendous pressure if they’re the solo income earner for their family. Not only are you at high risk of financial collapse if you lose your job, but the emotional toll that that can take and the impact on your mental health, confidence. My heart goes out to families that are suffering…”

The following is a transcript of the above video interview with Heidi McKillop, Director, Producer “A Stranded Nation”.

“… The interesting thing about when you see this issue in the news about oil and gas and that we don’t need it, for instance, or that it’s dirty oil and then it’s getting displaced to another jurisdiction around the world is quite literally the impact it has had directly in this province.

I mean, you can see in downtown Calgary especially, but definitely in the rural communities as well, like Grande Prairie, you name it. There has been an unbelievable shift in terms of what communities are up against with layoffs, and there’s a part of a documentary — I don’t know if you know this, but there was an article, and it was the suicide rates going up 30 percent in Alberta that year.

I mean, it’s a debate of if that was directly related related to the recession or not, that was part of it. But there was certainly a connection between economic downturn and mental health issues on the rise.

And that article was actually about a little girl that had killed herself because her dad had lost his job. And it was a really, really sad article, and I just said to myself, I was like, if people can’t have compassion about the fact that people are drastically getting affected in their family lives, then that’s probably not the messaging that we’re trying to reach to those people, because they are obviously showing a lack of compassion in that area. And that, to me, is very sad to see because it happens quite often.

Especially when I go home, you know, Alberta’s been booming for so many years and so many decades, people just think we’ve been booming for so long and long enough that it’s our time to suffer. But that’s just not the way that we should start thinking. It’s very dangerous. Yeah, it makes me so angry actually. Yeah, it’s pretty rough.

Heidi McKillop, Director, Producer “A Stranded Nation”

https://twitter.com/heidimckillop?lang=en

Alberta

What’s on Tap? – Rediscover Moonshine with Skunkworks Distillery

Published on August 7, 2020

Meghanne Uptigrove

An exciting new addition to the Calgary Barley Belt might look a little bit different than what regular patrons are used to seeing, or drinking. Skunkworks Distillery, a locally owned and operated micro-distillery, is bringing premium engineered moonshine to the craft beer party!

Originating in 2015 as an after-work-over-drinks project idea, the concept of Skunkworks Distillery was in the works for a few years before it began to take shape with Faye Warrington and Marty Lastiwka at the helm. Skunk Works is an engineering term coined at Lockheed Martin, referring to the Advanced Development Department, which focuses on innovative and unconventional approaches to new science and technology. “Skunk Works is a department that operates outside the mainstream of their company working on weird little side science projects or on new tech stuff,” says Faye, “for Marty and I, this is our Skunk Works. This is our science project.”

Located on the Barley Belt, southeast Calgary’s signature walking distance collection of craft breweries, Skunkworks distills smooth, small batch premium engineered moonshine that is as good over ice as it is in one of their many cocktails. Made from sugar beets refined in Taber, Alberta, Skunkworks offers three unique products: the original Skunkworks Moonshine, Hypersonic and Moonwater. With Skunkworks, Faye and Marty are committed to challenging the mason jar mentality that associates moonshine with a bootleg burn.

“Moonshine is a good way to bring people together. We all have a moonshine story,” Marty laughs, “It’s something people can always talk about, for better or for worse.”

The tasting room, much of which Faye and Marty built themselves, combines industrial space race vibes with a Mad Max steampunk flare that can’t be found anywhere else. Sip your Skunktail (Skunkworks cocktail) from a science lab beaker and enjoy some light snacks on a replica plane wing turned coffee table, while listening to live music from the in-house studio.

After countless hours of planning, searching and building, the taproom officially opened in November of 2019. Launching amidst the upheaval of a global pandemic and ensuing economic crash has made Skunkworks an operation well versed in thinking on their feet. “None of the normal rules for growing a business apply right now,” says Marty, “So we’re just adapting, we’re pivoting every day.”

Like a number of other breweries and distilleries around the city, Skunkworks transitioned to the production of hand sanitizer to help fill the gap during the height of the pandemic. The public response, according to Marty, was far more than they ever could have anticipated. “Everyone was just so desperate for it,” he says, “we were making it just to give away, and suddenly people were lined up around the block for it.”

While this wasn’t how they exactly envisioned their first few months in operation, it turned out to be a great way for the distillery to begin connecting with the community while helping out people in need. Given the uncertain circumstances and difficulties of the last several months, Faye says the support of the community and other local distilleries has been invaluable.

As things settle down, Faye and Marty are looking forward to being able to host live music again and are even exploring the idea of an outdoor concert on their (dog-friendly!) patio. Above all, the two are excited for the upcoming release of their latest product, a seasonal feature that is like “nothing you’ve ever tasted!” coming very soon.

To learn more about Skunkworks Distillery and what the Calgary Barley Belt has to offer, visit https://www.skunkworksdistillery.com

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