A
high net worth individual (HNWI) is a person with a high
net worthIn business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time. In the case of an individual, the term estate...
. In the
private bankPrivate banks are banks that are not incorporated. A private bank is owned by either an individual or a general partner with limited partner...
ing business, these individuals typically are defined as having investable assets (financial assets not including primary residence) in excess of US$1 million. As explained below, the U.S. Securities and Exchange Commission has promulgated a different definition of "high net worth individual" for regulatory purposes.
The Merrill Lynch - Capgemini World’s Wealth Report 2009 defines HNWIs as those who hold at least US$1 million in financial assets and Ultra-HNWIs as those who hold at least US$30 million in financial assets, with both excluding collectibles, consumables, consumer durables and primary residences.
A
high net worth individual (HNWI) is a person with a high
net worthIn business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time. In the case of an individual, the term estate...
. In the
private bankPrivate banks are banks that are not incorporated. A private bank is owned by either an individual or a general partner with limited partner...
ing business, these individuals typically are defined as having investable assets (financial assets not including primary residence) in excess of US$1 million. As explained below, the U.S. Securities and Exchange Commission has promulgated a different definition of "high net worth individual" for regulatory purposes.
World’s Wealth Report 2009
The Merrill Lynch - Capgemini World’s Wealth Report 2009 defines HNWIs as those who hold at least US$1 million in financial assets and Ultra-HNWIs as those who hold at least US$30 million in financial assets, with both excluding collectibles, consumables, consumer durables and primary residences. The report states that in 2008 there were 8.6 million HNWIs worldwide, a decline of 14.9% from 2007. The total HNWI wealth worldwide totaled US$32.8 trillion, a 19.5% decrease from 2007. The Ultra-HNWIs experienced the greater loss, losing 24.6% in population size and 23.9% in accumulated wealth. The report revised its 2007 projections that HNWI financial wealth would reach US$59.1 trillion by 2012 and revised this downward to a 2013 HNWI wealth valued at $48.5 trillion advancing at an annual rate of 8.1%.
Ultra-High-Net-Worth Individuals
UHNWI refers to
Ultra-High-Net-Worth Individuals, individuals or families who have at least US$30 million in investable assets. The number of ultra high net worth individuals worldwide is estimated at about 95,000. The exact dividing lines depend on how a bank wishes to segment its market; for example, the term
Very High Net Worth Individuals can refer to those with assets between $5 million and $50 million, with Ultra High Net Worth Individuals only those with above $50 million.
Banking and finance
Most global banks, such as
Credit SuisseThe Credit Suisse Group is a financial services company, headquartered in Zurich, Switzerland. Credit Suisse was founded by Alfred Escher in 1856 under the name Schweizerische Kreditanstalt . The bank is organized into three divisions, Investment Banking, Private Banking, and Asset Management...
,
Deutsche BankDeutsche Bank AG is an international Universal bank with its headquarters in Frankfurt, Germany. The bank employs more than 81,000 people in 76 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets.Deutsche Bank has offices in major financial centers,...
,
HSBCHSBC Holdings plc is a public limited company incorporated in England and Wales in 1990, and headquartered in London since 1993. As of 2009, it is both the world's largest banking group and the world's 6th largest company according to a composite measure by Forbes magazine.Hong Kong which served as...
, JPMorgan Chase or UBS, have a separate Business Unit with designated teams consisting of client advisors and product specialists exclusively for UHNWI. Because of their extreme high net worth and the way their assets were generated, these clients are often considered to have semi-
institutionalInstitutional investors are organizations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, retirement or pension funds, hedge funds and mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others....
or institutional like characteristics.
Retail
Brands in various sectors, such as
BentleyBentley Motors Limited is a British manufacturer of automobiles founded on 18 January 1919 by Walter Owen Bentley . Mr. Bentley had been previously known for his range of rotary aero-engines in World War I, the most famous being the Bentley BR1 as used in later versions of the Sopwith Camel...
,
MaybachMaybach-Motorenbau GmbH is a German luxury car manufacturer. It was founded in 1909 by Wilhelm Maybach with his son Karl Maybach as director. The company was originally a subsidiary of Luftschiffbau Zeppelin GmbH and was itself known as "Luftfahrzeug-Motoreinbau GmbH" until 1918...
and
Rolls-RoyceRolls-Royce Motor Cars is a British manufacturer of luxury automobiles based in Goodwood, England. It is the current producer of Rolls-Royce branded automobiles, whose historical production dates back to 1904. The factory is located across from the historic Goodwood Circuit in Goodwood, West...
in motoring, actively target UHNWI and HNWI to sell their products. Figures gathered by Rolls-Royce suggest there are 80,000 people in the UHNWI category around the world. They have, on average, eight cars and three or four homes. Three-quarters own a jet aircraft and most have a
yachtA yacht is a high end recreational boat. It designates two rather different classes of watercraft, sailing and power boats. Yachts are different from working ships mainly by their leisure purpose. It was not until the rise of the steamboat and other types of powerboat that sailing vessels in...
.
SEC regulations
The U.S. Securities and Exchange Commission requires all SEC-registered investment advisers to file periodically a report known as Form ADV. Among other things, Form ADV requires each investment adviser to state how many of his clients are "high net worth individuals." The Form ADV Glossary of Terms explains that a "high net worth individual" is an individual with at least $750,000 managed by the reporting investment adviser, or whose net worth the investment adviser reasonably believes exceeds $1,500,000 (or who is a "qualified purchaser" as defined in section 2(a)(51)(A) of the Investment Company Act of 1940). The net worth of an individual for SEC purposes may include assets held jointly with his or her spouse. Unlike the definitions used in the financial and banking trade, the SEC's definition of HNWI would include the value of a person's verifiable non-financial assets, such as a primary residence or art collection.
See also
- Millionaire
A millionaire is an individual whose net worth or wealth exceeds one million units of currency. It can also be a person who owns one million units of currency in a bank account or savings account...
- Billionaire
A billionaire is a person who has a net worth of at least one billion units of a currency, usually the US Dollar, Euro or the Pound. Forbes Magazine updates a complete list of US Dollar billionaires around the world every year.- Regions by net worth :...
- Swiss bank
- Wealth
Wealth is an abundance of valuable resources or material possessions. The word is derived from the old English wela, which is from an Indo-European word stem...
- Global assets under management
Global asset allocation or Global assets under management consists of pension funds, insurance companies and mutual funds. Other funds under management include private wealth and alternative assets such as hedge funds and private equity...