Rising life expectancies are extending Canadians’ financial horizons beyond 80 years of age, according to a top finance executive.
Little has changed over the last few years in terms of how clients want their portfolios to be managed and what they invest in, with blue chip investments and fee-based commission management remaining popular for customers of the Royal Bank of Canada (TSX:RY).
However, a new trend sees financial plans being adjusted to accommodate longer lifespans.
BIV spoke with RBC vice-president of financial planning specialists Howard Kabot, who offered insight on the current climate of the company’s wealth management sector following its recent acquisition of Vancouver-based HSBC Canada.
Clients are starting to focus their financial plans beyond their 80s and 90s, looking at what their options are and how they’ll age in a significant and healthy way.
“This is a trend that we’re starting to see, and something that will become more of a focus in the years to come,” said Kabot.
In the past, he said people predicted they would slow down by the time they were 80, choosing to stay closer to home.
However, healthier clients are now opting to travel and stay active going into their 80s, postponing those plans to their 90s.
“The population is getting healthier and they are living longer,” said Kabot. “When they needed a financial plan in the past, it was a standard to have enough money to get to 90. Now, we’re easily using 100.”
There is also a bigger emphasis on making funds last longer, planning for retirement homes or choosing to stay at home.
As a result, demand for financial planning firms has greatly increased, with RBC’s wealth management sector tripling in size over the last few years.
Kabot said the acquisition of HSBC has gone smoothly in the wealth management sector.
He added RBC has effectively brought along the new client base and advisors from HSBC, but it will take some time for them to get comfortable with the RBC platform.
“I would say it's not really about HSBC affecting the financial planning,” said Kabot. “It's more about us being able to respond to the needs of those clients, and we've been able to do that in an effective way.”
