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What is a HNWI?

By Adam Hill
Updated May 16, 2024
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In personal finance, the term “net worth” refers to the financial position of an individual, and it is calculated using the value of all of the individual’s assets, minus the total debt that the individual owes. For a simple example, if a person has $10,000 U.S. Dollars (USD) in cash, and $2,000 USD in stock, and owes $5,000 USD in debt on a vehicle, then that individual has a net worth of $7,000 USD. A person is said to be a High Net Worth Individual (HNWI) when his net worth exceeds a certain amount, usually defined at $1 million USD.

The value or liability of a person’s primary residence is usually not included in the calculation of net worth. However, the U.S. Securities and Exchange Commission (SEC) defines a HNWI by slightly different criteria for their own purposes. All investment advisers who are registered with the SEC are required to file reports, periodically, stating how many of their clients are HNWIs by the SEC’s definition.

For the purposes of filing this form, a HNWI is someone with at least $750,000 USD being managed by the investment adviser filing the report. If the adviser reasonably believes that the individual’s net worth exceeds $1.5 million, then this individual is also defined as a HNWI by the SEC. Unlike the criteria accepted in the banking and financial trade, the SEC includes the value of a person’s primary residence in determining net worth.

There also exist other, even higher classifications of net worth. The term Very High Net Worth Individual is usually defined as someone with a net worth that exceeds $5 million USD. Someone with more than $50 million USD in wealth would be considered an Ultra High Net Worth Individual (UHNWI). HNWIs and especially UHNWIs are in high demand by private wealth managers. Indeed, most global banks have entirely separate teams consisting of advisers and product specialists exclusively for UHNWIs. This is in part because the more wealth a person has, the more effort and time it takes to maintain and expand those assets. Because of their large wealth, an UHNWI can demand, and justify, personalized services in estate planning, tax planning, and asset management.

Apart from the financial services industry, retailers in various sectors market certain brands and products by actively targeting HNWIs and UHNWIs. High-end sports cars, personal jet aircraft, and yachts are among the items owned by and advertised to people in the HNWI and UHNWI categories.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By drtroubles — On Jun 01, 2011

If you are interested in a peek into the life of high net worth individuals search for millionaire magazine online. There are oodles of luxury goods being hawked for those who are HNWIs and beyond.

While most of use are making car payments and splurging on movie nights out, these folks are purchasing high-end fashions and yachts.

They offer a variety of publications, from cars for millionaires, to collectibles for millionaires.

This site has found its niche and browsing through there pages offers a very interesting peek into the life of HNWIs. If you really want to clutch your wallet, check out the magazine they publish for billionaires.

By MrSmirnov — On May 31, 2011

Looking at the demographics of those who are high net worth individuals (HNWI) can be a fascinating way to plan your own path to success. Most wealth management firms that handle the accounts with the most money report their general information for studies conducted by the World Wealth Report.

Some interesting trends over the last few years have been the move towards more global investments and the move to deal with companies that are more socially responsible.

If think if you view this kind of research, you can tailor your own businesses to appeal to those with big investment dollars.

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