High-Net-Worth Individual (HNWI): Criteria and Example

High Net Worth Individual (HNWI)

Investopedia / Mira Norian

What Is a High-Net-Worth Individual (HNWI)?

The term high-net-worth individual (HWNI) refers to a financial industry classification denoting an individual with liquid assets above a certain figure. People who fall into this category generally have at least $1 million in liquid financial assets.

The assets held by high-net-worth individuals are usually easily liquidated and would include things like their primary residence or fine art. HNWIs often seek the assistance of financial professionals in order to manage their money. Their high net worth often qualifies these individuals for additional benefits and opportunities.

Key Takeaways

  • A high-net-worth individual is somebody with at least $1 million in liquid financial assets.
  • HNWIs are in high demand by private wealth managers because it takes more work to maintain and preserve those assets.
  • These individuals also qualify for increased and better benefits.
  • The United States had the most HNWIs in the world in 2021, with more than 7.4 million people.
  • A very-high-net-worth individual has a net worth of at least $5 million while an ultra-high-net-worth individual is defined as having at least $30 million in assets.
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High Net Worth Individuals

Understanding Net Wealth of High-Net-Worth Individuals (HNWIs)

Individuals are measured by their net worth in the financial industry. Although there is no precise definition of how wealthy 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 but usually refers to people with a net wealth of seven figures or more. As noted above, people who fall into this category have more than $1 million in liquid assets, including cash and cash equivalents. These assets do not include things like personal assets and property such as primary residences, collectibles, and consumer durables.

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.

As such, a high-net-worth individual classification generally qualifies people 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.

HNWIs are also given more benefits than those whose net worth falls under $1 million. They may qualify for:

  • Services with reduced fees
  • Discounts and special rates
  • Access to special events

Their wealth allows high-net-worth individuals to take part in initial public offerings (IPOs) and invest in startups that demonstrate financial potential.

Benefits Afforded to HNWIs

As a high-net-worth individual (HNWI), you may qualify for banking, investment, and other financial services with reduced fees, discounts, and special rates, along with access to special events or perks. Some financial institutions may offer you personalized services in investment management, estate planning, and tax planning, among other things. Your wealth may also allow you to take part in initial public offerings (IPOs) and invest in startups that demonstrate financial potential.

HNWIs may, too, be able to invest in hedge funds, which are generally only open to accredited investors who meet certain criteria, including a minimum net worth requirement. HNWIs may also have access to private equity (PE) and venture capital (VC) funds, which are typically not available to the general public. Additionally, HNWIs may be able to invest in real estate and other alternative assets that are not as easily accessible to the general public.

These benefits and opportunities may vary depending on the financial institution and region.

Special Considerations

Almost 63% of the world's HNWI population lives in the United States, Japan, Germany, and China, according to the Capgemini World Wealth Report. The U.S. had about 7.5 million HNWIs in 2021, up 13.5% from the year before.

As a group, the HNWI population saw its assets grow 8.0% in 2021, reaching $86 trillion in wealth. North America led the world's HNWI wealth with $27.7 trillion, followed by Asia with $25.3 trillion. HNWI wealth in Europe was at $18.8 trillion, followed by Latin America with $9.0 trillion, the Middle East with $3.4 trillion, and Africa with $1.8 trillion.

Capgemini separates the HNWI population into three wealth bands:

  • Millionaires next door, who have $1 million to $5 million in investable wealth
  • Mid-tier millionaires with $5 million to $30 million
  • Ultra-HNWIs, which includes those with more than $30 million

Globally, the ultra-HNWI population numbered 200,100 in 2021. Mid-tier millionaires numbered 2.05 million, while the millionaires next door category made up the largest group at 20.1 million.

Top 10 Countries for High Net Worth Individuals, 2021
Country HNWI population  YoY growth
United States 7,460,000 13.5%
Japan 3,652,000 3.2%
Germany 1,633,000 6.4%
China 1,535,000 5.0%
France 775,000 8.5%
U.K. 609,000 6.3%
Switzerland 479,000 4.3%
Canada 439,000 8.9%
Netherlands 328,000 9.4%
Italy 322,000 7.1%

Source: Capgemini World Wealth Report

Types of High-Net-Worth Individuals

An investor with less than $1 million but more than $100,000 is considered to be a sub-HNWI. The upper end of HNWI is around $5 million, at which point the client is then referred to as a very-HNWI. More than $30 million in wealth classifies a person as an ultra-HNWI.

The very-high-net-worth individual (VHNWI) classification can refer to someone with a net worth of at least $5 million. Ultra-high-net-worth individuals (UHNWIs) are defined as people with investable assets of at least $30 million. This, of course, excludes personal assets and property, collectibles, and consumer durables.

How Are HNWIs Categorized?

The most commonly quoted figure for qualification as a high-net-worth individual is at least $1 million in liquid financial assets, excluding personal assets such as a primary residence. Investors with less than $1 million but more than $100,000 liquid assets are considered sub-HNWIs. Very-high-net-worth individuals have a net worth of at least $5 million, while ultra-high-net-worth individuals are worth at least $30 million.

What Benefits Do HNWIs Get?

HNWIs generally qualify for separately managed investment accounts instead of regular mutual funds. They are also in high demand by private wealth managers. These individuals generally require personalized services in investment management, estate planning, tax planning, and other areas.

Which Countries Have the Most High-Net-Worth Individuals?

The countries with the most HNWIs are the United States, Japan, Germany, then China, in that order. These countries make up approximately 64% of the world's HNWI population. In 2021, the U.S. had roughly 7.46 million HNWIs; Japan had 3.65 million; Germany, 1.63 million; and China, 1.54 million.

The Bottom Line

A high-net-worth individual (HNWI) is someone with liquid assets of at least $1 million. These individuals often seek the assistance of financial professionals to manage their money, and their high net worth often qualifies them for additional benefits and opportunities. HNWIs are in high demand by private wealth managers because it takes more work to maintain and preserve their assets, and they may have access to unique investment opportunities. The United States boasts the most HNWIs in the world.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Capgemini Research Institute. "World Wealth Report 2022," Page 10.

  2. Capgemini Research Institute. "World Wealth Report 2022," Page 7.

  3. Capgemini Research Institute. "World Wealth Report 2022," Page 11.

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