Your wealthy clients will likely cover most of their children’s education costs.
A BMO Private Banking study finds parents with more than $1 million in investable assets pay 69% of their children’s post-secondary school costs, on average.
That could be because parents worry their kids may not fare well financially after graduation: 36% think grads won’t be able to maintain their standard of living, and 35% doubt their kids can get jobs after graduating.
And how do parents pay for school? Most (69%) use personal savings, while 12% have their children cover some costs. Six percent rely on scholarships, while 4% of respondents said relatives would pay.
“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,” says Myra Cridland, head of 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.”
BMO’s study also found that 16% of affluent Canadian parents have children attending private school from kindergarten to grade 12. The vast majority (90%) pay for their children’s private school tuition themselves, and more than three quarters (77%) said this expense has put minimal strain on their finances.