High Net Worth Investing In Canada 2023

Who are High Net Worth Individuals?

We know a person or household’s net worth is just the difference between assets and liabilities. 

So a high net worth individual just refers to a person with substantially more assets than liabilities right?


A High Net Worth Individual (HNWI) is a specific label that financial institutions use to refer to people or households that hold above a certain threshold of liquid assets minus their liabilities. 

The key point here is that only liquid assets are counted in the net worth calculation. Liquid assets being assets that can be converted into cash quickly and easily. Another name for liquid assets is “investable assets,” basically money that’s ready to be invested at a moment’s notice.

It’s no surprise financial institutions are really only focused on liquid assets. After all, they can only charge fees on new money you invest with them. They can’t make money from your Toronto house that appreciated to astronomical levels (which is an example of an illiquid asset).

The threshold for being classified as a HNWI is typically $1 Million dollars net liquid assets, but some banks like TD and investment firms like Mackenzie Investments do have a lower, $500,000 net liquid assets threshold.

A HNWI can enjoy special services and perks compared to regular joe-schmo, main street investors (like me). Examples of special services include: separately managed investment accounts instead of mutual funds, personal tax planning, and personalized estate planning. 

Perks and benefits include: reduced fees, special rates, and VIP access to special events.

By the way, there are even higher tiers of high worth individual classifications. Someone with net liquid assets over $5 Million is considered a Very High Net Worth Individual. More than $30 Million in investable assets would make a person an Ultra High Net Worth Individual.

This might all sound a bit out of reach – but times are quickly changing. The number of HNWI keeps on growing. As of 2021, there are about 400,000 HNWI in Canada, which works out to be about 1% of the population. The top 1% is no longer just reserved for the ultra rich. Even some young people working at the right company in the right industry (*ahem* tech) can achieve HNWI status quite early in life.

High Net Worth Investing Strategies

The best high net worth investing strategy, like any investing strategy, depends on your goals. Most people invest to generate high returns over a long time horizon in order to secure a comfortable (luxurious?) retirement. 

Being a high net worth individual, your retirement is likely quite secure already – but you don’t become a high net worth individual by squandering the power of your money. Many HNWl’s want to use that money to generate high returns and increase their wealth.

Long term wealth generation and growth is a great goal for high net worth individuals and main street investors alike.

The optimal strategy for long term wealth generation is, in principle, the same for everyone: Assemble a basket of diversified investments (usually stocks) at low fees and hold them for a long time. So if long term wealth generation is the goal, then our advice for high net worth individuals is the same as for any other passive investor: pursue a disciplined strategy that ignores the market noise (such as dividend investing or index investing) diversify across industries, markets, geopolitical boundaries, and across asset classes; rebalance once in a while and hold on for the long haul.

Because HNWI portfolios are so large, it’s even more important to minimize fees. It can be worth thousands to chase after a few basis points in management fee savings. If you want to keep managing your own investments or use a robo-advisor service, pay even more attention to fund management fees. Even the tiniest percentage fee difference can translate into substantial savings.

In our latest Best Canadian Online Brokers Comparison, Qtrade came out on top, not least for its incredible $5,000 cash back promotion. Get the promo details here. The summary is that adding $2 Million new funds into a new Qtrade trading account will earn the maximum $5,000 cash back bonus. This promo is made for a High Net Worth Investor. Check out our full Qtrade review.

For robo-advisors, WealthSimple is our favourite. You can read the full shootout for Best Robo Advisors in Canada.

Although the fundamental approach suggested is the same for HNWI and everyone else, one small tweak to HNWI could be to keep more cash on the sidelines. Not out of fear of being over invested, but rather to keep the buying power handy to take advantage of opportunities such as sudden market drops or business opportunities.

As an example, I missed a good chunk of the 2020 lockdown market crash because it took time to liquidate some assets and took time to transfer between my accounts. If I had more cash on hand waiting in the wings, I could have bought more aggressively into the market dip. I didn’t have much cash ready and missed much of the roaring growth after the March 2020 market crash.

While a large portion of your investments should be in equities, I recommend keeping 15% to up to 30% in cash and wait for opportunities to buy aggressively into a market crash or other opportunities. This is the approach for building the best high net worth asset allocation over time.

High Net Worth Investing Strategies for Different Goals

Having a high net worth gives you the financial freedom and security to try different things and have different goals. Say a big part of your portfolio is already dedicated to long term wealth generation, then you can afford to invest the rest of your wealth in fun and creative ways.

If you want more excitement in your portfolio and are willing to take on more risk, you can dedicate a portion to more speculative investments like collectibles, commodities, or cryptocurrencies. 

Do you have an interest in vintage sports cards, comic books, or art? Maybe those interests can be channeled into a side trading hobby. Have fun and make profit at the same time. See our guide on Collectible Investing In Canada for more ideas.

How about commodities? If you are interested in analyzing economics and predicting global resource supply and demand, you can try your hand at commodities speculation. See our guide on How to Invest in Commodities in Canada for more details.

Just about everyone and their uncles are talking about bitcoin these days. Whether crypto will usher in the next financial revolution or end up being a huge flop, it sure looks like an exciting ride. If you’d like to try that wild rollercoaster, you can allocate a portion of your investments to crypto currencies. You can invest in big, more established coins, gamble on obscure, joke alt-coins, or both. To get started, check out our Bitcoin Canada Guide.

Everything is best enjoyed in moderation, even fun. Please only use a small portion of your overall wealth for speculative investments like collectibles, commodities, and cryptocurrencies.

High Net Worth Investing After Retirement

Congratulations on retiring with a big nest egg! Our typical recommendation for retirees is to gradually transition their equity asset allocation to safer investments like bonds, GICs, and high interest saving accounts.

The same recommendation applies to high net worth individuals too but only up to the point where the safe portion of the portfolio guarantees a comfortable retirement lifestyle. That is, if the low risk bonds in your portfolio already give you enough interest income to sustain the retirement you want, then there is no need to transition more of your equity holdings into safer fixed income investments. Leave the equity assets to grow to maximize your estate, which can be left to heirs or to charity.

High Net Worth Portfolio Management

This article focused mostly on DIY investment styles and strategies, but of course, we know there are plenty of professional money managers out there ready to help you manage your portfolio. If you want to work with a bank, definitely take advantage of discounts for HNWIs and the other perks or services offered to get your money’s worth.

There is also no shortage of hedge funds out there that would be happy to sign up a high net worth client. Their promises of high returns can be very tantalizing. However, we don’t recommend hedge funds to main street investors, nor do we recommend them to high net worth investors. Their high fees simply cannot be justified.

It’s incredible how many hedge funds can get away with outrageous management fees for weak performance not even close to returns from simple index funds. Sure, the very top hedge funds can outperform the overall market index; some funds even do so with some consistency. But hindsight is twenty-twenty. The chances of finding the lucky fund that consistently outperforms the market is very low. In the meanwhile, it’s not worth the high fees to search for that rare, consistently high-performing hedge fund.

High Net Worth Investing For Canadians – FAQ


Investing strategies for a High Net Worth Individual are fundamentally the same as those for typical main street investors. The same basic wealth generation principles apply whether you’re investing $1,000 or $1 Million. But, we did talk about a couple tweaks that can be made to the basic strategy.

During the wealth accumulation years, a high net worth individual should keep a sizable allocation in cash to take advantage of investment opportunities. Then later in retirement, the individual should only transition enough of their portfolio to safe, fixed income investments to sustain the lifestyle they want. Any more than that would waste the growth potential of such a large nest egg.

Finally, don’t forget to have some fun with your investments. Why not dabble in riskier investments like collectibles, crypto currencies, or other speculative instruments. Leave the main portion of your portfolio to quietly grow, and enjoy more exciting investments on the side. You deserve it!

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Yang is a mechanical engineer by day and an avid learner by night. He has a wide range of interests and hopes to turn his interest in personal finance into helpful articles for other Canadians along their path to financial freedom.
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11 months ago

I work with several advisors and people in the HNW range.
All of the advisors require $2mm to qualify unless you have some other connection to get in. Many are “culling” their smaller accounts to keep the client size manageable.

Clyde Hadley
11 months ago

Thank you for the regular and helpful emails that address so many investment topics. My question is about your thoughts on having cash available for market dips as you illustrated. I have also read here and elsewhere that it is best to stay invested and not to try to time the market. Can you please clarify both positions ie: regular investing vs saving for market sales. Thank you.