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What does it mean to be “Affluent” in Canada?

Canada has a di­verse and dy­namic pop­u­la­tion of high net worth in­di­vid­u­als. When it comes to cat­e­go­riz­ing these in­di­vid­u­als, fi­nan­cial ad­vi­sors of­ten use the terms “mass af­flu­ent,” “affluent,” and “ultra af­flu­ent.” While these terms are not clearly de­fined and can vary de­pend­ing on the source, they gen­er­ally re­fer to in­di­vid­u­als with dif­fer­ent lev­els of wealth and fi­nan­cial re­sources.

Mass Affluent

The term “mass af­flu­ent” is of­ten used to de­scribe in­di­vid­u­als with in­vestable as­sets be­tween $100,000 and $1 mil­lion. These in­di­vid­u­als have a com­fort­able lifestyle, but they may not have the same level of fi­nan­cial re­sources as those in higher wealth cat­e­gories. According to a 2020 re­port by Investor Economics, there are ap­prox­i­mately 3.8 mil­lion mass af­flu­ent house­holds in Canada, ac­count­ing for roughly 24% of all house­holds.

Affluent

The term “affluent” typ­i­cally refers to in­di­vid­u­als with in­vestable as­sets be­tween $1 mil­lion and $10 mil­lion. These in­di­vid­u­als have a high level of wealth and of­ten en­joy a lux­u­ri­ous lifestyle, with ac­cess to ex­clu­sive ser­vices and prod­ucts. According to the same Investor Economics re­port, there are ap­prox­i­mately 375,000 af­flu­ent house­holds in Canada, ac­count­ing for roughly 2.4% of all house­holds.

Ultra Affluent

The term “ultra af­flu­ent” is used to de­scribe in­di­vid­u­als with in­vestable as­sets of over $10 mil­lion. These in­di­vid­u­als have a sig­nif­i­cant amount of wealth and of­ten have ac­cess to ex­clu­sive in­vest­ment op­por­tu­ni­ties and fi­nan­cial ser­vices. According to a 2020 re­port by Knight Frank, there were ap­prox­i­mately 10,100 ul­tra-high net worth in­di­vid­u­als (UHNWIs) in Canada, rep­re­sent­ing 0.1% of the global UHNWI pop­u­la­tion.

Sources:

  • Investor Economics, “Distribution of Wealth in Canada: The Financial Performance and Preferences of Canadian Households,” 2020.
  • Knight Frank, “The Wealth Report 2021,” 2021.

In con­clu­sion, while the terms “mass af­flu­ent,” “affluent,” and “ultra af­flu­ent” are not clearly de­fined, they gen­er­ally re­fer to in­di­vid­u­als with dif­fer­ent lev­els of wealth and fi­nan­cial re­sources. Canada has a di­verse pop­u­la­tion of high net worth in­di­vid­u­als, with ap­prox­i­mately 3.8 mil­lion mass af­flu­ent house­holds, 375,000 af­flu­ent house­holds, and 10,100 ul­tra-high net worth in­di­vid­u­als. These in­di­vid­u­als of­ten have ac­cess to ex­clu­sive ser­vices and prod­ucts, and fi­nan­cial ad­vi­sors must un­der­stand their unique needs and pref­er­ences to pro­vide ef­fec­tive ad­vice and guid­ance.

NEXT STEPS

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