OREANDA-NEWS. 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:

  • Personal savings (69 per cent)
  • Child's own savings (12 per cent)
  • A scholarship (6 per cent)
  • Money from relatives (4 per cent)

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:

  • Maintain their standard of living after graduating (36 per cent)
  • Get a job after graduation (35 per cent)
  • Achieve high grades (27 per cent)
  • Finish their post-secondary education (24 per cent)

"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:

  • Provide their children with a better education (73 per cent)
  • Set their children up for future success with post-secondary education (49 per cent) and a career (31 per cent)
  • Create a valuable network for their children (28 per cent)

"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.