This past year will be remembered as a roller coaster ride. Between increasing tariffs, falling interest rates, fluctuating economic growth, and the familiar estate planning and tax-related issues that always arise, there was plenty to keep us on our toes. However, 2025 also provided many valuable takeaways that can help inform how high-net-worth families strategize in the year ahead. Here are five key themes that emerged over the past 12 months.
1. Stay calm and carry on
Investors are often advised not to panic, but if there were one year when panicking would be understandable, it would have been this one. In fact, many people did back in April, when U.S. President Donald Trump slapped tariffs on 90 countries on “Liberation Day,” sending markets into a tailspin. The markets, however, rebounded a few weeks later and stayed strong through the rest of the year. Canadians were once again reminded of the importance of staying invested, but many also learned the value of controlling their emotions during volatile times. Given that markets always move, as we enter a new year, remember: don’t follow the crowd, use market data to inform your decisions and conduct thorough research before making any significant investment moves.
2. Do what’s within your control
You can only control what you can control. While you may have been pleased to see interest rates fall to 2.25% from 3% this year – especially if you have a variable-rate mortgage – unless you’re Bank of Canada governor Tiff Macklem, you can’t force rates to move down any further. Rather than worrying about interest rates, inflation and economic growth, focus on creating a comprehensive wealth plan that can withstand the inevitable ups and downs that happen in the market every year. For instance, you can prepare for the decisions that matter most to your family’s financial future by knowing how to handle wealth-related family conversations, an area where planning ahead pays off far more than trying to outrun inflation. The lesson? Plan ahead and focus on what’s in your power.
3. Tax planning is a year-round endeavour
One important lesson from the year’s volatility is the power of proactive tax planning. Continuing to invest is important for building wealth, but it’s only one part: keeping more money in your pocket by minimizing taxes is another critical factor in growing your net worth. Too often, though, tax planning happens at the last minute. If you have a complex portfolio or estate, you’ll want to explore ways to reduce your tax bill not only for 2026, but also for the years ahead. Make sure to know the key tax deadlines so you’re not scrambling, and consider working with a financial advisor to find the right tax strategies to deploy.
4. Enhance your diversification
You can never be reminded enough about the power of diversification. That’s always true, but it’s especially important in a year like 2025, when markets and long-term interest rates gyrated, sometimes wildly. This year, stocks soared, especially the S&P/TSX Composite Index, which, as of December 16, was up nearly 27%. At the same time, the Canadian bond market was essentially flat, with the BMO Aggregate Bond Index ETF (ZAG) down about 1% year-to-date. Earlier in the year, the two asset classes took turns being up and down, which helped balance out the tariff-related volatility. As we move into next year, you may want to consider diversifying even further into alternatives if you’re a qualified investor, which tend to have an inverse relationship with stocks and bonds.
5. Watch out for cybercrime
Scams and fraud are commonplace these days, and even digitally savvy Canadians can fall victim. Unfortunately, it’s happening more often as criminals use artificial intelligence to expand their reach and deploy more sophisticated schemes like hacking company networks, creating deepfake videos and phone calls of loved ones in distress. In 2024, Canadians lost $638 million to fraud – there’s a good chance that number will be higher in 2025. High-net-worth individuals and family offices are frequently targeted, so stay vigilant. If a call or video chat doesn’t seem right, listen to your gut. Use preventative tactics like family code words, strong passwords and multifactor authentication. Consider investing in cybersecurity protection for your business. BMO’s cybersecurity expert, Larry Zelvin, Executive Vice President and Head of Financial Crimes Unit at BMO Financial Group, explains more here.
It’s impossible to know what 2026 will bring, but you can take steps now to help protect and grow your wealth in the new year and beyond.
