BMO Private Banking, part of BMO Wealth Management, today released a new study examining affluent Canadians' (those with investible assets of $1 million or more) attitudes and preferences around their children's education and how they plan to finance the expenses associated with it. The study is part of a series examining trends among Canada's wealthy.
According to the study, among wealthy Canadians who are parents, 61 per cent have or expect to have children enrolled in university or college. The costs of their children's post-secondary education (including tuition, books, supplies and living expenses) are covered by:
When thinking about their children's time in university or college, affluent Canadians are less concerned with how their children will perform academically than how they will fare financially after graduation. The study showed that wealthy Canadians are most worried about their children's ability to:
"Although wealthy Canadians intend to pay for a majority of their children's university or college expenses themselves, they also expect to share some of the costs with their children," said Myra Cridland, Head, BMO Private Banking. "This makes it all the more important to teach children about personal finance issues, including saving and investing, at an early age. Regardless of one's income level, financial literacy is critical to setting up our kids for future success."
Ms. Cridland added that BMO Private Banking offers a program called Financial Fluency, which caters to the children of clients who are looking to gain general financial knowledge and learn about investment principles in order to develop their personal finances and family wealth. Participants get insight into: how to manage debt and leverage credit; the basics of wealth planning; investing and the use of different asset classes; investment risk and opportunities; and the psychology of investing.
Private School: Education Saving Starts Early
The study also found that just 16 per cent of affluent Canadian parents have children that are attending private school from kindergarten to grade 12. The vast majority (90 per cent) pay for their children's private school tuition themselves, and more than three quarters (77 per cent) said this expense has put minimal strain on their finances. Just under one quarter (23 per cent) feel they have had to cut corners in other aspects of their lives as a result of tuition payments.
The wealthy Canadians who chose private over public school for their children said they did so because they believe private school will:
"Parents have eighteen years to plan for university or college expenses, but have much less time to ensure they have a wealth plan that accounts for a child's private school tuition," said Ms. Cridland. "It's a good idea to think about the type of elementary and secondary schooling you'd like your children to receive as early as possible so you can incorporate an education component into your wealth plan and begin earmarking funds towards tuition payments."
Survey results cited in this study are from an online survey that was conducted by Pollara between October 15th and 28th, 2014 with a sample of 306 Canadians 18 years of age and older, who have at least $1 million in investable assets (excluding employers retirement plans, insurance products or their home).
About BMO Private Banking (formerly BMO Harris Private Banking)
Backed by the stability and resources of BMO Financial Group, professionals at BMO Private Banking are responsible for the successful management of wealth by providing expert advice and highly personalized services -- all in a coordinated approach. Banking services are provided by Bank of Montreal. Investment management services are provided by BMO Private Investment Counsel Inc. Estate, Trust, Planning and Custodial Services are offered through BMO Trust Company.
For more information on BMO Private Banking, please visit http://www.bmo.com/privatebanking
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Over the next 30 to 40 years, Baby Boomers will pass an estimated $30 trillion in wealth to their heirs. Yet when it comes to having detailed conversations about how these wealth transfers will take place, many Baby Boomers (as well as older retirees) often fail to communicate effectively with their adult children about these sensitive topics.
Fidelitys 2014 Intra-Family Generational Finance Study* revealed that, while 75% of adult children and their parents agree that its important to have frank conversations about wills, estate planning, retirement readiness, and eldercare issues, about four in 10 parents have not had detailed discussions with their adult children. In fact, one in 10 has not had any conversations about the critical topic of wills and estate planning. Moreover, when families do discuss these subjects, the conversations often lack depth. The timing of these conversations is also a cause for misalignment with 64% of parents and their adult children in disagreement about when these conversations should take place. According to the study, parents want to have these discussions after retirement, while their adult children want them earlier.
Ideally, detailed conversations on these matters should take place well before retirement to ensure that families are adequately prepared, says Larry Sinsimer, senior vice president of practice management at Fidelity Financial Advisor Solutions. Although its understandable that parents may have sensitivities and want to delay discussing personal financial matters, advisors may want to focus on helping their clients set these concerns aside and have frank discussions sooner rather than later. This will give their clients adult children more time to anticipate, plan, and make smarter, more informed decisions.
As a result of avoiding these critical conversations, disagreement exists within families over important topics, according to the study. For example:
- 43% of adult children expect to handle caregiving duties, whereas only 6% of parents expect this to be the case.
- 56% of adult children say their parents often worry about financial security, when only 23% of parents actually do.
- Adult children significantly underestimate the value of their parents estate by nearly $300,000
Fidelitys survey results underscore the communications gap that exists between some parents and their adult children on a variety of wealth transfer and eldercare issues. However, they also highlight an opportunity for advisors to demonstrate their value by serving as facilitators of estate planning and wealth transfer conversations.
In fact, both parents (61%) and their adult children (57%) in the study report that they are more comfortable talking to a financial advisor than to one another about these sensitive issues.
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[Business Wire] The Nasdaq Private Market, LLC and Morgan Stanley Wealth Management today announced a joint initiative to make available wealth management education and services to employees and participants in private company liquidity programs.
Read more on this.
Morgan Stanley (MS), valued at $73.92B, started the session at $37.75.
Looking at the equity, the companys one day range is $37.55 to $37.90 and has traded between $31.35 and $41.04 over the past 12 months.
Priced at 12.46x this years forecasted earnings, MS shares are relatively inexpensive compared to the industrys 14.67x forward p/e ratio.
And for those looking to make a return holding the stock, the company pays shareholders $0.60 per share annually in dividends, yielding 1.60%.
In a review of the consensus earnings estimate this quarter, 24 sell-side analysts are looking at $0.73 per share, which would be $0.08 better than the year-ago quarter and a $0.01 sequential increase. The full-year EPS estimate is $3.03 which would be a $0.71 better than last years full-year earnings.
The quarterly earnings estimate is predicated on a consensus revenue forecast of $8.89 Billion. If reported, that would be a 2.30% increase over the year-ago quarter.
More recently, Atlantic Equities Initiated MS at Neutral (May 7, 2015). Previously, MKM Partners Initiated MS at to Buy.
When considering if perhaps the stock is under or overvalued, the average price target is $41.87, which is 10.91% above where the stock opened this morning.
Summary (NYSE:MS): Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. The companys Institutional Securities segment offers financial advisory services on mergers and acquisitions, divestitures, joint ventures, corporate restructurings, recapitalizations, spin-offs, exchange offers, leveraged buyouts, takeover defenses, and shareholder relations, as well as provides capital raising and corporate lending services. This segment also engages in sales, trading, financing, and market-making activities, including institutional equity, fixed income and commodities, research, and investment activities, as well as offers financing services, such as prime brokerage, consolidated clearance, settlement, custody, financing, and portfolio reporting services. Its Wealth Management segment provides brokerage and investment advisory services covering various types of investments comprising equities, options, futures, foreign currencies, precious metals, fixed income securities, mutual funds, structured products, alternative investments, unit investment trusts, managed futures, separately managed accounts, and mutual fund asset allocation programs. This segment also offers education savings programs, financial and wealth planning services, annuity and other insurance products, cash management services, trust and fiduciary services, individual and corporate retirement solutions, and credit and other lending products, as well as fixed income principal trading services. The companys Investment Management segment provides alternative investment products, such as hedge funds, private equity and real estate funds, and portable alpha strategies to institutional and intermediary channels, and high net worth clients, as well as engages in real estate investing and merchant banking businesses. Morgan Stanley was founded in 1924 and is headquartered in New York, New York.
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