Loading the player...

What is a 'High Net Worth Individual - HNWI'

High net worth individual (HNWI) is a classification used by the financial services industry to denote an individual or a family with liquid assets above a certain figure. Although there is no precise definition of how rich someone must be to fit into this category, high net worth is generally quoted in terms of having liquid assets of a particular number. The exact amount differs by financial institution and region.

BREAKING DOWN 'High Net Worth Individual - HNWI'

A high net worth individual classification generally qualifies for separately managed investment accounts instead of regular mutual funds. This is where the fact that different financial institutions maintain varying standards for HNWI classification comes into play. 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.

What Makes a High Net Worth Individual?

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 "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."

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.

Where do HNWIs live?

The Capgemini World Wealth Report reveals that as of 2017, the United States had the most HNWIs in the world, at more than 5.28 million, and seeing 10% growth in its HNWI population from 2016. The entire HWNI population globally grew by 11.2% in 2017. 

Moreover, 61.2% of the global HNWI population reside in four countries: the United States, Japan, Germany and China. The major country with the largest increase in HNWI population for 2017 was India, growing 20% from 2016. South Korea had the second best growth, with a 17% increase. North America had 31.3% of the HNWI population, and Asia-Pacific had 34.1%. Of the HNWI population in North America, the U.S. made up 96% of the continent's HNWI population.  

Europe saw a 7.3% growth in HNWI population for 2017, with Germany growing by 7.6%. Ireland posted the highest HNWI population growth in Europe, coming in at 15.3%. Meanwhile, HNWI population for the U.K. was just 1.2%. Sweden was the only market to jump two places in the HNWI population ranking, coming in at 23rd, and posting 14% HNWI population growth. 

RELATED TERMS
  1. Private Banking

    Private banking includes personalized financial and banking services ...
  2. Net Worth

    Net worth is a concept applicable to individuals and businesses ...
  3. Passive Activity

    Passive activity is activity that a taxpayer did not materially ...
  4. Working-age Population

    The working-age population in a region is the range of ages considered ...
  5. Fund

    A fund is a source of money that is allocated for a specific ...
  6. Sample

    A sample is a smaller, manageable version of a larger group. ...
Related Articles
  1. Insights

    Top Ranking Nations By HNWI

    The United States, Japan and Germany together make up 53.3% of the total worldwide high net worth individual population.
  2. Managing Wealth

    How Young Millionaires Invest Their Money

    How the young and wealthy invest may come as a surprise.
  3. Insights

    4 Global Economic Issues of an Aging Population

    Discover why dramatic increases in life expectancy is creating significant socioeconomic challenges for many advanced industrialized nations.
  4. Managing Wealth

    Americans Are Getting Richer...Kind Of

    Americans are getting richer – the number of affluent households is growing – but the rate is slower now than it was before the Great Recession.
  5. Financial Advisor

    3 Reasons to Invest in Asia's Emerging Markets

    Emerging markets in Asia aren't on the rise at the moment, but they're best days are likely to be in the future. Here's why.
  6. Financial Advisor

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
  7. Personal Finance

    Average Net Worth Of The 1%

    Here's a look at how much the super-rich in the world are really worth.
  8. Tech

    What Wealth Managers Need to Survive the Future

    Here is some insight into why wealth managers should accelerate plans to adopt technology and be willing to partner with financial tech firms.
  9. Personal Finance

    Where Americans With the Best and Worst Credit Scores Live

    Mississippi and Georgia have a high percentage of people with poor credit scores, while North Dakota has the lowest
RELATED FAQS
  1. What are the disadvantages of using a simple random sample to approximate a larger ...

    Learn here what a simple random sample is, how researchers use it as a statistical tool and the disadvantages it carries ... Read Answer >>
  2. What are liquid assets, and why are they beneficial to a business?

    Learn the difference between liquid and fixed assets, and how a company's liquidity affects its financial health. Read Answer >>
  3. What are the advantages of using a simple random sample to study a larger population?

    Learn how simple random sampling works and what advantages it offers over other sampling methods when selecting a research ... Read Answer >>
Trading Center