Who are High-Net-Worth Individuals ? Example , Criteria , Importance and More 2024 Edition

Who are High-Net-Worth Individuals ?

A high-net-worth individual (HNWI) is someone who has a lot of liquid assets, usually more than $1 million, not counting their main home.

Liquid assets can be defined as those things which can be easily converted to cash, such as:

• Cash: Money in bank accounts.

• Investments: Stocks, bonds, mutual funds, and other easily liquidated financial instruments.

Different levels of wealthy individuals:

High Net Worth Individual (HNWI): Has over $1 million in assets (excluding their main home).

Very High Net Worth Individual (VHNWI) or a person having at least $5 million in assets.

Ultra High Net Worth Individual (UHNWI) or a person having at least $30 million or more in investible assets.

Billionaire: A special category within UHNWIs, with a net worth of over $1 billion.

These categories help in understanding wealth distribution, setting investment rules, and creating marketing and business strategies.

Why High-Net-Worth Individuals (HNWIs) Matter to the Financial Industry

High-net-worth individuals (HNWIs) are very important to the financial industry for several reasons:

Big Money Managers: HNWIs have a lot of money to manage, which helps financial institutions earn revenue from fees and investments.

Need for Special Services:They need personalized financial advice and services that go beyond what most people require. This includes things like tailored investment plans and estate planning.

Profit for Banks and Firms: Financial institutions make significant profits from serving HNWIs because they pay higher fees and use more services.

Exclusive Investments: HNWIs can access special investment opportunities, like private equity and hedge funds, which are not available to everyone.

Economic Impact: Their investments help businesses grow and innovate. Many also give to charity, which benefits society.

As of December 2023, there are over 16 million high-net-worth individuals (HNWIs) globally, according to the World’s Wealthiest Cities Report 2024 by Henley & Partners.

Here’s a breakdown of key points:

Global HNWIs: Over 16 million people have assets exceeding $1 million.

United States HNWIs: The U.S. has the highest number of HNWIs, with 5.5 million individuals.

The states with the most HNWIs are California, Texas, New York, Florida, and Illinois.

New York City: The wealthiest city, home to 349,500 HNWIs.

Ultra-High-Net-Worth Individuals (UHNWIs)

Population Proportion: UHNWIs make up only 0.003% of the global population.

Wealth Share: They control 13% of the world’s total wealth.

Statistics from 2017: There were 226,450 UHNWIs, with a combined wealth of $27 trillion

Where Are Most High-Net-Worth Individuals (HNWIs) in 2024?

In 2024 the top 10 countries with the highest number of high net worth individuals (HNWIs), are as follows:

• The US always remains at the top, with approximately 24.5 million HNWIs.

• China follows with about 7.6 million HNWIs.

• Japan has around 3.4 million HNWIs

• Germany hosts approximately 3.2 million HNWIs.

• English Country, the UK has about 2.9 million HNWIs

• France has around 2.8 million HNWIs.

• Canada counts about 2.4 million HNWIs.

• Australia is home to about 2.2 million HNWIs.

• Italy has around 1.6 million HNWIs.

• Switzerland completes the top ten with approximately 1.2 million HNWIs.

These rankings reflect the global distribution of wealth, with significant concentrations in North America, Europe, and Asia. The economic policies, business environments, and opportunities in these countries play a crucial role in attracting and retaining wealthy individuals.

Exclusive Benefits for High-Net-Worth Individuals (HNWIs)

Due to their significant financial assets, High-net-worth individuals (HNWIs) enjoy several exclusive benefits and opportunities such as :

• HNWIs often receive lower fees on banking, investment, and other financial services.

• They get better interest rates on loans and special rates on deposits.

• They have investment opportunities that are not available to the general public, such as hedge funds, private equity (PE) funds, and venture capital (VC) funds.

• These investments typically require a minimum net worth, which HNWIs meet.

• Special Events and Perks: Financial institutions often invite HNWIs to exclusive events, such as private dinners, networking events, and seminars with industry experts.

• They receive additional perks like concierge services, travel benefits, and priority customer service.