Navigating the world of wealth management in Canada requires more than just smart investing-it demands a comprehensive approach that includes financial planning, estate planning, and ongoing investment management. As Canadian families face a historic intergenerational wealth transfer, understanding how to leverage accounts like RRSPs, TFSAs, and RESPs is essential for building and protecting your legacy. In this blog, we explore proven strategies used by leading wealth management companies to help you achieve your long-term goals, ensure effective portfolio management, and empower the next generation with the financial literacy they need to thrive. Whether you’re planning for retirement, education, or a seamless wealth transfer, discover how a holistic approach to wealth and investment management can secure your family’s financial future.
Why Financial Literacy Matters for Families
Canada is experiencing a historic intergenerational wealth transfer, with over $1 trillion expected to move between generations by 2026. However, research shows that 70% of families lose their wealth by the second generation, and 90% by the third. The primary cause is not poor investments but a lack of financial literacy, planning, and communication about wealth management. Teaching financial skills to children and grandchildren is essential for protecting family wealth and ensuring a successful transfer.
Financial literacy – the knowledge and skills needed to make informed money decisions – forms the foundation of successful wealth transfer. Without it, even the most substantial inheritances can quickly diminish across generations.
Financial literacy need not be a daunting topic: It simply means knowing how to manage, save, and grow your money wisely. Teaching these skills to your children and grandchildren can help keep your family’s wealth strong for years to come.
Listen to our Conversations on Wealth Podcast Episode ‘How to introduce children to wealth’ or read more here.
Maximizing Registered Accounts: The Building Blocks of Wealth Preservation
Canada offers several tax-advantaged registered accounts that serve as powerful tools for building and preserving wealth. Understanding how to strategically use these accounts is a fundamental aspect of financial literacy and wealth planning.
Understanding Registered Accounts: RESP, TFSA, and RRSP
Canada has three main types of registered savings accounts that can help you save and grow your money:
1. Registered Education Savings Plan (RESP)
The Registered Education Savings Plan (RESP) remains one of the most effective ways to save for a child's post-secondary education. With no annual contribution limit (though capped at a $50,000 lifetime limit per beneficiary) and up to $7,200 in Canada Education Savings Grants (CESG), these accounts provide significant tax-sheltered growth for educational purposes.By introducing children to their RESP early, you can help them understand the value of education and long-term saving.
- What it’s for: Saving for your child’s college or university.
- Key benefit: The government gives you up to $7,200 in grants, and your investments grow tax-free until your child uses the money for school.
- Limits: No yearly limit, but you can put in up to $50,000 per child over time.
2. Tax-Free Savings Account (TFSA)
The Tax-Free Savings Account (TFSA) offers unparalleled flexibility with tax-free growth on investments. With the 2025 contribution limit set at $7,000, TFSAs provide an excellent opportunity to teach young adults about tax-efficient investing. The TFSA's flexibility makes it an ideal first account for young adults, allowing withdrawals anytime without penalties – perfect for both emergency funds and longer-term goals.
- What it’s for: Saving for anything—emergencies, a house, or just investing for the future.
- Key benefit: Your money grows tax-free, and you can take it out whenever you need it.
- Limits: You can put in $7,000 in 2025, and any unused room carries forward.
3. Registered Retirement Savings Plan (RRSP)
The Registered Retirement Savings Plan (RRSP) continues to be the cornerstone of retirement planning in Canada, with a 2025 contribution limit of $32,490. Understanding the tax advantages of RRSPs – tax-deductible contributions and tax-deferred growth – is essential knowledge for long-term financial planning. For higher-income earners or anyone with employer-matching contributions, maximizing RRSP contributions should be a priority.
- What it’s for: Saving for your retirement.
- Key benefit: You get a tax break when you put money in, and your investments grow tax-free until you take them out.
- Limits: You can contribute up to $32,490 in 2025, or 18% of your income (whichever is less).
Wealth Management Strategies for Families
Financial literacy extends beyond understanding account structures to encompass broader money management principles. When teaching the next generation about wealth, consider these key areas:
Start Financial Education Early
Talk to your kids about money from a young age. Even simple lessons—like saving part of their allowance—can make a big difference. As they get older, show them how savings accounts work and explain the basics of investing.
Have Open Communication and Family Meetings
Don’t be afraid to talk about your family’s finances. Discuss your values, your goals, and how you manage money. Regular family meetings can help everyone feel more comfortable talking about these topics.
Digital Tools for Financial Education
In 2025, digital content plays a crucial role in promoting financial literacy. Online resources, educational apps, and simulation tools can make learning about finance more engaging and accessible for younger generations who are digital natives. These resources allow for self-paced learning and practical application of financial concepts.
Professional Wealth Management Advice
A financial advisor can help you make the most of your savings accounts and plan for the future. They can also help guide family discussions and answer any questions you or your children might have.
Make the Most of Registered Accounts
- RESP: Start early to get the full government grant and let your money grow.
- TFSA: Encourage young adults to open a TFSA as soon as they turn 18.
- RRSP: Teach your family about the benefits of saving for retirement and how RRSPs can help.
Helping Young Adults Achieve Financial Independence
Many young adults today face big challenges—like expensive housing, student loans, and slow wage growth. This means they often need extra help from their parents. By teaching your kids how to save and invest, you can help them become more independent and confident with money.
Conclusion: Building Lasting Family Wealth
Wealth management in Canada is about more than investments — it’s about education, communication, and strategic planning. Financial literacy is the key to building and keeping family wealth. By using accounts like the RESP, TFSA, and RRSP, and by talking openly about money, you can help your children and grandchildren make smart choices and protect your family’s future. If you want help with your savings plans or have questions about passing on your wealth, talk to a financial advisor. They can help you create a plan that works for your family.
Questions?
Our team is always here to help with wealth management, estate planning, and comprehensive financial planning.
Contact us today to schedule a conversation.
The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. Richardson Wealth Limited does not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.
Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.