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Mobile millionaires place family and quality
of life above business interests: RBC Wealth Management
Global mobility shapes investment approach;
Cultural ties influence wealth transfer and philanthropy
TORONTO, December 10, 2012 - A global, nomadic approach
to personal and professional life is a key factor to the success
of millionaires around the world, according to a new research
report released today by RBC Wealth Management and The Economist
Intelligence Unit (EIU). Quality of life and family needs
were the top considerations for millionaires who left their
birth country in search of success, rated as important by
88 per cent and 79 per cent respectively, while business interests
were a key factor for two-thirds (67 per cent)..
The report, Wealth
Through the Prism of Culture and Mobility, investigates
the investment, wealth transfer and charitable-giving behaviours
of individuals who live, work, or spend more than half their
time outside their country of birth and have investable assets
of at least US$1 million. Focusing on this group of internationally-mobile
wealthy individuals (IMWIs), the report highlights how the
global paths of the wealthy influence their key wealth decisions.
"As globalized economies converge, high net worth individuals
have increasingly international footprints, with personal
and professional interests in multiple geographies,"
said George Lewis, Group Head, RBC Wealth Management &
Insurance. "Our experience working with high net worth
clients around the world shows that their success is often
strongly influenced by a global perspective about building,
protecting and ultimately transferring wealth to future generations."
A Global Approach To Income And Investing
According to the survey, most internationally-mobile wealthy
individuals (60 per cent) generate the majority of their income
from the country they now call home. In turn, almost half
(48 per cent) invest the majority of their income back into
their country of residence, while nearly a third (32 per cent)
invest primarily in their country of origin. IMWIs take a
similarly global approach when it comes to what they invest
in, with global equities favoured by over a third (36 per
cent), compared to just a quarter (25 per cent) of millionaires
who have stayed in their home country.
Real Estate The Top Asset Class For Mobile Millionaires
Real estate leads the list of preferred asset classes for
the internationally-mobile wealthy, with over half (53 per
cent) having it as a high or very high proportion of their
portfolio. A propensity to invest very heavily in real estate
is apparent among those living in the Asia-Pacific region,
with almost a third (31 per cent) doing so compared to just
seven per cent of their counterparts in North America and
10 per cent of those in Western Europe. Mobile millionaires
are also more likely to have significant investments in precious
metals compared to their home-based wealthy peers (21 per
cent versus 13 per cent).
Wealth Transfer And Charitable Giving: Which Home Is
Where The Heart Is?
The most common approach to wealth transfer is to leave enough
to their family so they are comfortable but still have to
work for a living (33 per cent). However, unique differences
exist based on where respondents were born. Those from Asia-Pacific
are the most likely to leave all their assets to their families,
with 41 per cent planning to do so, compared to just over
a quarter (27 per cent) of IMWIs from other regions. Meanwhile,
North Americans are the most likely to leave assets to charity,
with 29 per cent planning significant donations compared to
just 11 per cent of IMWIs from other markets. Despite these
varied plans, over a third of respondents do not have a will
(37 per cent) and admit to not fully understanding the tax
regimes their assets are subject to (34 per cent), factors
which may impact what their families and charitable causes
will inherit.
North American Residents Give Where They Live
While birth country influences charitable giving as part of
an estate plan, country of residence affects current levels
of donations among mobile millionaires, likely due to levels
of government social spending and charitable tax benefits.
Respondents in North America prefer to give where they live,
with three-quarters (76 per cent) giving to local causes,
while those in the Asia-Pacific region are more focused on
their birth countries, with 48 per cent giving to causes back
at home, 38 per cent to causes where they reside and 13 per
cent to causes in other countries. Children's charities receive
27 per cent of total donations from respondents followed by
health, education and poverty reduction causes, which attract
13, 12 and 11 per cent of donations respectively.
Internationally-mobile wealthy individuals: Fast facts
- They are generally self-made, having earned their wealth
as professionals
- (29 per cent), entrepreneurs (17 per cent) or as executives
of public organizations (12 per cent). Less than a third
(30 per cent) grew up with high net worth parents.
- Younger millionaires (aged 40 and under) generated wealth
through more diverse means, with only 17 per cent earning
wealth as professionals, compared to 26 per cent of those
aged 41-to-50 group and 41 per cent of those older than
50.
- Those born in Asia-Pacific generated wealth at a younger
age, with almost half (46 per cent) aged 40 and under, compared
to 19 per cent of those from other regions.
- Residents of Singapore and UK are the most likely to have
three or more personal residences, with 29 per cent and
28 per cent calling at least three places home respectively,
compared with 18 per cent of those in Canada and nine per
cent of those in the U.S.
These are some of the findings from Wealth
Through the Prism of Culture and Mobility, a research
study conducted by The Economist Intelligence Unit through
June to October 2012. The EIU conducted an online survey of
558 high-net-worth individuals, using a stratified sample
that included 300 respondents who live or work outside their
country of birth or spend more than half of their time outside
their home country. Survey findings from the latter group
of IMWIs forms the basis for most of this report, while the
258 non-mobile respondents provide benchmarks for comparison.
The EIU also conducted a number of in-depth interviews with
select survey respondents in person or by phone. The margin
of error, with a sample size of 558 and a confidence level
of 95 per cent, is 4.15.
About RBC Wealth Management
RBC
Wealth Management is one of the world's top 10 largest
wealth managers. RBC Wealth Management directly serves affluent,
high-net-worth and ultra-high-net-worth clients in Canada,
the United States, Latin America, Europe, the Middle East,
Africa and Asia with a full suite of banking, investment,
trust and other wealth management solutions. The business
also provides asset management products and services directly
and through RBC and third-party distributors to institutional
and individual clients, through its RBC Global Asset Management
business (which includes BlueBay Asset Management). RBC Wealth
Management has more than C$577 billion of assets under administration,
more than C$339 billion of assets under management and approximately
4,300 financial consultants, advisors, private bankers and
trust officers.
About RBC
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries
operate under the master brand name RBC. We are Canada's largest
bank as measured by assets and market capitalization, and
among the largest banks in the world, based on market capitalization.
We are one of North America's leading diversified financial
services companies, and provide personal and commercial banking,
wealth management services, insurance, investor services and
wholesale banking on a global basis. We employ approximately
80,000 full- and part-time employees who serve more than 15
million personal, business, public sector and institutional
clients through offices in Canada, the U.S. and 49 other countries.
For more information, please visit rbc.com.
About The Economist Intelligence Unit
The Economist Intelligence Unit (EIU) is the world's leading
resource for economic and business research, forecasting and
analysis. It provides accurate and impartial intelligence
for companies, government agencies, financial institutions
and academic organisations around the globe, inspiring business
leaders to act with confidence since 1946. EIU products include
its flagship Country Reports service, providing political
and economic analysis for 195 countries, and a portfolio of
subscription-based data and forecasting services. The company
also undertakes bespoke research and analysis projects on
individual markets and business sectors. More information
is available at www.eiu.com.
The EIU is headquartered in London, UK, with offices in more
than 40 cities and a network of some 650 country experts and
analysts worldwide. It operates independently as the business-to-business
arm of The Economist Group, the leading source of analysis
on international business and world affairs.
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Media contacts:
Claire Holland
(North America),
claire.holland@rbc.com, +1 416 974-2239
Paul French (EMEA),
paul.french@rbc.com, +44 (0) 20 7002 2013
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