Who do you think are considered as High Net Worth Individuals?
High net worth individual (HNWI) is a classification used by the financial services industry to refer an individual or a family with high net worth of wealth.The categorization is relevant because high net worth individuals generally qualify for separately managed investment accounts instead of regular mutual funds. High net worth is generally quoted in terms of liquid assets over a certain figure. The exact amount differs by financial institution and region. HNIs are in high demand by private wealth managers. The more money a person has, the more work it takes to maintain and preserve those assets.
Different financial institutions maintain different minimum standards for HNWI classification. Most banks require that a customer have a certain amount in liquid assets and/or a certain amount in depository accounts with the bank to qualify for special HNWI treatment.
To be considered as one of the member of this elite club the most commonly quoted figure is $1 million in liquid financial assets. An investor with less than $1 million but more than $100,000 is considered to be “affluent” or perhaps even “sub-HNWI.” The upper end of HNWI is around $5 million, at which point the client is then referred to as “very HNWI.” More than $30 million in wealth classifies a person as “ultra HNWI.”
According to The World Wealth Report it appears that as of 2015, the United States boasts the most HNWIs in the world at over 4.45 million. HNWIs represent over 1.3% of the U.S. population. Moreover, 61.2% of the global HNWI population reside in four countries: The United States, Japan, Germany and China. The two Asian countries on the list, Japan and China, had the largest increases in HNWI population between 2014 and 2015 at 11% and 16%, respectively. The biggest drop in HNWI population was suffered by Brazil, which had 8% fewer HNWIs in 2015 than in 2014.
Nevertheless, looking ahead, global HNWI wealth is projected to grow by almost eight percent annually from the end of 2014 through to 2017, to reach US $70.5 trillion, led by Asia-Pacific at an anticipated growth rate of 10.3 percent. Europe is expected to act as a more prominent engine of HNWI wealth expansion at 8.4 percent annually, as a result of improved optimism for a more substantial recovery throughout the region, while the wealth of HNWIs in North America is anticipated to grow by a more modest 7percent.
In addition, the only reason why HNIs have been defined or categorized is to show their financial standing that these investors are generally perceived to be richer than others. It is simple, they have wealth in abundance.
Written by: Alan Smith for Global data brokers