High Net Worth Individual - HNWI

AAA

DEFINITION of 'High Net Worth Individual - HNWI'

A classification used by the financial services industry to denote an individual or a family with high net worth. Although there is no precise definition of how rich somebody must be to fit into this category, high net worth is generally quoted in terms of liquid assets over a certain figure. The exact amount differs by financial institution and region. The categorization is relevant because high net worth individuals generally qualify for separately managed investment accounts instead of regular mutual funds.

BREAKING DOWN 'High Net Worth Individual - HNWI'

The most commonly quoted figure for membership in the high net worth "club" 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 $50 million in wealth classifies a person as "ultra HNWI".

HNWIs 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. These individuals generally demand (and can justify) personalized services in investment management, estate planning, tax planning, and so on.

RELATED TERMS
  1. Billionaire

    An individual who has assets or a net worth of at least one billion ...
  2. Tycoon

    A prominent figure in a particular industry who has built up ...
  3. Deficit Net Worth

    A scenario in which liabilities are higher than assets. Deficit ...
  4. Status Symbol

    A status symbol is an object which is meant to signify its owners' ...
  5. Sophisticated Investor

    A type of investor who is deemed to have sufficient investing ...
  6. Family Offices

    Family offices are private wealth management advisory firms that ...
Related Articles
  1. Entrepreneurship

    Donald Trump Success Story: Net Worth, Education & Top Quotes

    Discover more about Donald Trump the man. Learn about his history and back story, path to success and current political aspirations.
  2. Investing Basics

    How To Become A Sophisticated Investor

    No one doubts the value and importance of investor education and sophistication, but many investors are not really all that sophisticated. Goldman Sachs was scrutinized for marketing complex ...
  3. Personal Finance

    Assets That Increase Your Net Worth

    Your home, properties and vehicles can all increase your net worth.
  4. Investing

    The Importance Of Knowing Your Net Worth

    It is vital that you track your net worth no matter what your age.
  5. Entrepreneurship

    How To Calculate Your Tangible Net Worth

    Your net worth can be calculated with a simple equation.
  6. Economics

    J.D. Rockefeller: From Oil Baron To Billionaire

    More than 70 years after his death, this man remains one of the great figures of Wall Street.
  7. Budgeting

    Common Liabilities That Hurt Your Net Worth

    Every penny that you keep out of the liability side of the net worth equation essentially ends up on the asset side.
  8. Personal Finance

    The Complete Guide To Calculating Your Net Worth

    Here's everything you need to know about calculating your net worth.
  9. Retirement

    What's Your Net Worth Telling You?

    Net worth provides a road map for retirement - learn if you're headed in the right direction.
  10. Personal Finance

    McMansion: A Closer Look At The Big House Trend

    The average home size is now 2,500 square feet - how big should you go?
RELATED FAQS
  1. What type of funding options are available to a private company?

    Similar to public companies, private companies also need funding for various reasons. A business typically needs the greatest ... Read Full Answer >>
  2. Under what circumstances would I benefit from a high net worth insurance policy?

    A high-net-worth insurance policy is specifically tailored to suit the needs of high-net-worth individuals. It is specifically ... Read Full Answer >>
  3. In which countries do high-income earners pay the most tax?

    It is difficult to identify those countries with the highest tax burdens on high net worth individuals. The most commonly ... Read Full Answer >>
  4. In which US cities do high-income earners pay the most tax?

    There are several different ways that cities tax high-net-worth (HNWIs) individuals. The most direct and obvious method is ... Read Full Answer >>
  5. How can premium financing of life insurance help high net worth individuals (HNWI)?

    Premium financing of life insurance can help high-net-worth individuals (HNWI) by maximizing use of capital, avoiding lost ... Read Full Answer >>
  6. How can I protect my business from my spouse during a high net worth divorce?

    For high net worth individuals (HNWIs), deciding to end a marriage through divorce brings special circumstances to consider. ... Read Full Answer >>
  7. Under what circumstances would I require private wealth management?

    An investor who is a high-net-worth individual (HNWI) may require private wealth management services. HNWIs have unique financial ... Read Full Answer >>
  8. What is private wealth management?

    Private wealth management is an investment advisory practice that incorporates financial planning, portfolio management and ... Read Full Answer >>
  9. Which US cities have the highest number of high-income households?

    According to the most recent U.S. Census report on the geographic concentration of high-income households conducted in 2 ... Read Full Answer >>
  10. When is litigation better than mediation in a high net worth divorce case?

    Typically, litigation is better than mediation in high-net-worth divorce cases for two major situations – when there are ... Read Full Answer >>
  11. Why are fee-based accounts preferred by many high net worth individuals (HNWI)?

    High net worth individuals (HNWIs) often prefer fee-based investment accounts for reasons that include reduced conflicts ... Read Full Answer >>
  12. Why are high net worth divorces considered more challenging than other divorce cases?

    All divorces are emotionally difficult and create a financial strain on the parties involved. As it pertains to dividing ... Read Full Answer >>
  13. How do I attract high net worth individuals (HNWI) as clients at my financial advisor ...

    While the majority of financial advisers provide wealth management and comprehensive financial planning to a wide range of ... Read Full Answer >>
  14. How does life insurance help high net worth individuals protect their businesses ...

    Life insurance protects the businesses and personal wealth of high-net-worth individuals, or HNWI, by guaranteeing their ... Read Full Answer >>
  15. Which states are the most expensive for high-income earners?

    The most expensive states for high-income earners are California, Hawaii and New York. The tax rates assessed by these states ... Read Full Answer >>
  16. What are the benefits of high net worth insurance?

    High-net-worth individuals (HWNI) face unique insurance challenges and tend to gravitate towards different insurance products. ... Read Full Answer >>
  17. What developed countries have the highest concentration in the banking sector?

    The developed countries with the highest concentration in the banking sector, as of 2015, are the United States, the United ... Read Full Answer >>
  18. Why should you invest in tangible assets?

    Savers who deliberately buy tangible assets for investment purposes value their tangible goods as a form of value diversification ... Read Full Answer >>
  19. What are examples of popular companies in the banking sector?

    Banking sector stocks, considered among the safest investments, are a perennial favorite with investors and are also popular ... Read Full Answer >>
  20. Why is it important for a financial advisor to have a unique value proposition?

    It's important for a financial adviser to have a unique value proposition for the same reason that it's important for any ... Read Full Answer >>
  21. What percentage of asset management firms are privately held and not publicly traded?

    Approximately 10% of asset management firms are privately held companies. However, that figure is misleading because the ... Read Full Answer >>
  22. What was the millionaire boom?

    When Ronald Reagan took office in 1981, he brought in an agenda to try and clear the remnants of stagflation that plagued ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  2. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  3. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  4. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  5. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  6. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!