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High-net-worth individual (HNWI) is a term used by some segments of the
financial services Financial services are the economic services provided by the finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contra ...
industry to designate persons whose investible
wealth Wealth is the abundance of valuable financial asset A financial asset is a non-physical asset whose value is derived from a contractual claim, such as deposit (finance), bank deposits, bond (finance), bonds, and participations in companies' sh ...

wealth
(
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s such as
stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities i ...

stock
s and bonds) exceed a given amount. Typically, these individuals are defined as holding financial assets (excluding their
primary residence A person's primary residence, or main residence is the dwelling In law, a dwelling (also known as a residence or an abode) is a self-contained unit of accommodation used by one or more households A household consists of one or several perso ...
) with a value greater than US$1 million. "Very-HNWI" (VHNWI) can refer to someone with a net worth of at least US$5 million. The
Capgemini Capgemini SE is a French multinational corporation A multinational company (MNC) is a corporate A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, leg ...

Capgemini
World Wealth Report 2020 defines an additional class of ultra-high-net-worth individuals (UHNWIs), those with US$30 million in investable assets. As of June 2020, there were estimated to be just over 13 million HNWIs in the world. The United States had the highest number of HNWIs (4,700,000) of any country, while
New York City New York, often called New York City to distinguish it from New York State New York is a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of ...

New York City
had the most HNWIs (348,000) among cities.


United States: SEC regulations

The
U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is a large independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929 The Wall Street Crash of 1929, also known as the Great Crash ...
requires all SEC-registered investment advisers to periodically file a report known as Form ADV. Form ADV requires each investment adviser to state how many of their clients are "high-net-worth individuals", among other details; its Glossary of Terms explains that a "high-net-worth individual" is a person who is either a "qualified client" under rule 205-3 of the Advisers Act (currently a person with at least $1,100,000 managed by the reporting investment adviser, or whose net worth the investment adviser reasonably believes exceeds $2,200,000 without counting their primary residence) or who is a "qualified purchaser" as defined in section 2(a)(51)(A) of the
Investment Company Act of 1940 The Investment Company Act of 1940 (commonly referred to as the '40 Act) is an act of Congress An Act of Congress is a statute enacted by United States Congress, Congress. Acts can affect only individual entities (called private laws), or the gen ...
). The Dodd-Frank Wall Street Reform Act mandated that the definition of a qualified client be reviewed every five years and adjusted for inflation. 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.


Annual World Wealth Report

The World Wealth Report was co-published by
Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management Investment management is the professional asset management Asset management refers to a system ...
and
Capgemini Capgemini SE is a French multinational corporation A multinational company (MNC) is a corporate A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, leg ...

Capgemini
, previously known as Cap Gemini Ernst & Young who worked together since c. 1993, investigating the "needs of high-net-worth individuals" to "successfully serve this market segment". Their first annual World Wealth Report was published in 1996. The World Wealth Report defines HNWIs as those who hold at least US$1 million in assets excluding primary residence and ultra-HNWIs as those who hold at least US$30 million in assets excluding primary residence. The report states that in 2008 there were 8.6 million HNWIs worldwide, a decline of 14.9% from 2007. The total HNWI
wealth Wealth is the abundance of valuable financial asset A financial asset is a non-physical asset whose value is derived from a contractual claim, such as deposit (finance), bank deposits, bond (finance), bonds, and participations in companies' sh ...

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%. The 2018 World Wealth Report https://worldwealthreport.com/ was jointly produced by Capgemini and
RBC Wealth Management Royal Bank of Canada (RBC; french: Banque royale du Canada) is a Canada, Canadian multinational financial services company and the Big Five (banks), largest bank in Canada by market capitalization. The bank serves over 16 million clients and ha ...
and included, for the first time, the Global HNW Insights Survey produced in collaboration with Scorpio Partnership. The inaugural survey represented one of the largest and most in-depth surveys of high-net-worth individuals ever conducted, surveying more than 4,400 HNWIs across 21 major wealth markets in North America, Latin America, Europe, Asia-Pacific, Middle East, and Africa. The World Wealth Report has estimated the number and combined investable wealth of high-net-worth individuals as follows (using the
United States Consumer Price Index The United States Consumer Price Index (CPI) is a set of consumer price index, consumer price indices calculated by the U.S. Bureau of Labor Statistics (BLS). To be precise, the BLS routinely computes many different CPIs that are used for dif ...
(CPI) Inflation Calculator):


Markets

Certain products cater to the wealthy, whose
conspicuous consumption In sociology and in economics, the term conspicuous consumption describes and explains the consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or Service (economics), services primarily f ...
of
luxury goods In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant ...
and services includes, for example:
mansion A mansion is a large dwelling house. The word itself derives through Old French from the Latin word ''mansio'' "dwelling", an abstract noun derived from the verb ''manere'' "to dwell". The English word ''manse'' originally defined a property la ...

mansion
s,
yacht A yacht is a sailing or power vessel used for pleasure, cruising, or racing. There is no standard definition, so the term applies to such vessels that have a cabin with amenities that accommodate overnight use. To be termed a , as opposed to a ...

yacht
s, first-class airline tickets and private jets, and personal
umbrella insurance Umbrella insurance refers to liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liability, the area of law in which manuf ...
. As economic growth has made historically expensive items affordable for the middle-class, purchases have trended towards intangible products such as education. In the United States,
concierge medicine Concierge medicine, also known as retainer medicine, is a relationship between a patient and a primary care physician A patient having his blood pressure measured A primary care physician (PCP) is a physician A physician (American Engl ...
is an emerging trend as of 2017.


Banking and finance

Most global banks, such as
Santander Santander may refer to: Boats *Santander 30, a British sailboat Places *Santander, Spain, the original place to receive this name, a port city and capital of the autonomous community of Cantabria, Spain *Santander Department, a department of Col ...

Santander
,
Barclays Barclays plc () is a British multinational Investment banking, investment bank and financial services company, headquartered in London, England. Apart from investment banking, Barclays is organised into four core businesses: Retail banking, pe ...

Barclays
,
BNP Paribas BNP Paribas S.A. is a French international banking group. It is the world's 8th largest bank by total assets, and currently operates with a presence in 72 countries. It was formed through the merger of Banque Nationale de Paris BNP Paribas S.A. i ...

BNP Paribas
,
Citibank Citibank is the consumer division of financial services Financial services are the economic services provided by the finance Finance is the study of financial institutions, financial markets and how they operate within the financial sys ...

Citibank
,
Credit Suisse Credit Suisse Group AG is a global investment bank Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In f ...

Credit Suisse
,
Deutsche Bank Deutsche Bank AG () is a German multinational investment bank Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effo ...

Deutsche Bank
,
HSBC HSBC Holdings plc is a British multinational Multinational may refer to: * Multinational corporation, a corporate organization operating in multiple countries * Multinational force, a military body from multiple countries * Multinational state ...

HSBC
,
JPMorgan Chase JPMorgan Chase & Co. is an American multinational Multinational may refer to: * Multinational corporation, a corporate organization operating in multiple countries * Multinational force, a military body from multiple countries * Multinational ...

JPMorgan Chase
, and
UBS UBS Group AG is a Swiss multinational and company founded and based in . Co-headquartered in the cities of and , it maintains a presence in all major financial centres as the and the in the world. UBS client services are known for their ...

UBS
, have a separate business unit with designated teams consisting of client advisors and product specialists exclusively for UHNWI. These clients are often considered to have characteristics similar to
institutional investors An institutional investor is an entity which pools money to purchase securities A security is a tradable financial asset A financial asset is a non-physical asset In financial accounting Financial accounting is the field of accountin ...
because the vast majority of their net worth and current income is derived from passive sources, rather than
labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer Literature * Labor (journal), ''L ...

labor
. By 2006, asset managers working for HNW individuals invested more than £300 billion on behalf of their clients. These wealth managers are bankers who in 2006, earned multimillion-pound salaries and owned their own companies and equity funds. In 2006, a list of the 50 top investment bankers was published by the Spear's Wealth Management Survey.


Magazines

Certain magazines, such as ''
Monocle A monocle is a type of corrective lens A corrective lens is a lens (optics), lens (i.e. a transmissive optical device) that is typically worn in front of the Human eye, eye to improve daily Visual perception, vision. The most common use ...
'', ''
Robb Report The ''Robb Report'' is an United States, American, English language, English-language, luxury goods, luxury-lifestyle (sociology), lifestyle magazine featuring products, including car, automobiles, aviation, boating, real estate and watches. Founde ...
'', and ''
Worth Worth may refer to: Places In the United States: * Worth, Georgia *Worth County, Georgia Worth County is a County (United States), county located in the south central portion of the U.S. state of Georgia (U.S. state), Georgia. As of the 2010 ...
'', are designed for a high net worth audience.


Retail

Brands in various sectors, such as
Bentley Bentley Motors Limited is a British manufacturer and marketer of Luxury vehicle, luxury cars and Sport utility vehicle, SUVs, and a subsidiary of the Volkswagen Group since 1998. Headquartered in Crewe, England, the company was founded as B ...

Bentley
,
Maybach Maybach () is a German car brand that exists today as a part of Mercedes-Benz Mercedes-Benz (), commonly referred to as Mercedes, is both a German automotive marque and, from late 2019 onwards, a subsidiary – as Mercedes-Benz AG – of ...

Maybach
, and
Rolls-Royce Rolls-Royce (always hyphenated) may refer to: * Rolls-Royce Limited Rolls-Royce was a British luxury car and later an aero-engine manufacturing business established in 1904 in Manchester Manchester () is the most-populous city and metr ...
actively target UHNWI and HNWI to sell their products. In 2006, Rolls-Royce researchers suggested there were 80,000 people in ultra-high-net-worth category around the world. UHNW individuals "have, on average, eight cars and three or four homes. Three-quarters own a jet aircraft and most have a yacht."


Number of HNWIs per city

The following is a list of the cities with the most HNWIs as of December 2018 as per the 2019 World Ultra Wealth Report published by Wealth-X.


Number of UHNWIs per city


Knight Frank Wealth Report 2019


Wealth-X Report 2020


Migration of HNWIs by Country

The following table shows the countries with the highest net inflow of HNWIs in 2018 and 2017 according to an annual report conducted by
AfrAsia Bank AfrAsia Bank Limited, commonly known as AfrAsia Bank, is authorized and regulated by the Bank of Mauritius. Headquartered in the Mauritius International Financial Centre with representative office in South Africa, AfrAsia specialises in banking th ...
in partnership with New World Wealth. The report excludes the war-torn countries of Syria, Libya and Iraq because data from those countries is unreliable. ''Caribbean'' includes Bermuda, Cayman Islands, Virgin Islands, St. Barts, Antigua, St Kitts & Nevis, etc.
''Notes:'' Figures rounded to nearest 1000.
''Source:'' AfrAsia Bank - Global Wealth Migration Review 2018 & 2019 The following table shows the countries with the highest net outflow of HNWIs in 2017. ''Notes:'' Figures rounded to nearest 1000.
''Source:'' AfrAsia Bank - Global Wealth Migration Review 2018 & 2019


Academic studies of asset management trends

The Wharton Global Family Alliance (WGFA) whitepaper was released in 2008 to study the investment strategies of single family offices in the United States and in Europe. The research was segregated into sub-groups representing those with less than $1 billion in assets and those with assets above $1 billion. The study found that U.S. families reported a more aggressive attitude toward investment objectives than their counterparts in Europe. One recommendation of the WGFA study advised the advisors and family offices serving this niche to avoid complexity in the structure of portfolios. The authors of the cite that the more complex the portfolio and number of holdings, the more difficult the job of performing adequate governance, reporting, and education. The Institute for Private Investors, a peer networking organization for wealthy families and their advisors, suggested a similar theme to its membership in 2008 with a conference themed, "The Return to Simplicity". Kotak Wealth Management and
CRISIL CRISIL (formerly ''Credit Rating Information Services of India Limited'') is an Indian analytical company providing ratings, research, and risk and policy advisory services and is a subsidiary of American company S&P Global S&P Global Inc. (p ...
Research, published a report on the Ultra High Net Worth Individuals in India titled "Top of the Pyramid Report". Niall J Gannon and Michael Blum published a
whitepaper A white paper is a report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. The term orig ...

whitepaper
in '' The Journal of Wealth Management'' in 2006 titled The After-Tax Return of Stocks Versus Bonds for the High Tax Bracket Investor. The paper found that the return of indexed stock portfolios fell from 10.62% for non-taxable portfolios to 6.72% for a portfolio that paid the highest federal income and capital gains tax rate. The paper observed rolling 20 year periods from 1961–2006. The study was updated by Gannon and Scott Seibert, CFA in ''Tailored Wealth Management: Exploring the Cause and Effect of Financial Success''." This study began at the inception of the
S&P 500 Index The Standard and Poor's 500, or simply the S&P 500, is a stock market index In finance, a stock index, or stock market index, is an Index (economics), index that measures a stock market, or a subset of the stock market, that helps invest ...
in 1957 through year end 2018 and calculated the after-tax return to be 7.36%.


See also

*
Billionaire A billionaire is a person with a net worth Net worth is the value of all the non-financial and financial asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. ...

Billionaire
*
Ultra high-net-worth individual Ultra-high-net-worth individuals (UHNWI) are defined as having a net worth Net worth is the value of all the non-financial and financial asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a ...
*
Millionaire A millionaire is an individual whose net worth Net worth is the value of all the non-financial and financial asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic ...
*
Middle class The middle class is a class Class or The Class may refer to: Common uses not otherwise categorized * Class (biology), a taxonomic rank * Class (knowledge representation), a collection of individuals or objects * Class (philosophy), an an ...
*
Global assets under management Global assets under management consists of assets In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial informatio ...
*
Senior management Senior management, executive management, upper management, or a management is generally individuals at the highest level of management Management (or managing) is the administration of an organization An organization, or organisation ...
*
Professional A professional is a member of a profession A Profession is a disciplined group of individuals who adhere to ethical standards and who hold themselves out as, and are accepted by the public as possessing special knowledge and skills in a wid ...
*
Plutonomy Plutonomy (, a portmanteau A portmanteau (, ) or portmanteau word (from "portmanteau (luggage) A portmanteau is a piece of luggage Baggage or luggage consists of bags, cases, and containers which hold a travel Travel is the movemen ...
*
Politically exposed person In financial regulation Financial regulation is a form of regulation Regulation is the management of complex systems A complex system is a system composed of many components which may interaction, interact with each other. Examples of c ...
*
Wealth Wealth is the abundance of valuable financial asset A financial asset is a non-physical asset whose value is derived from a contractual claim, such as deposit (finance), bank deposits, bond (finance), bonds, and participations in companies' sh ...

Wealth
*
National wealth National net wealth, also known as national net worth, is the total sum of the value of a country's asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processi ...
*
List of countries by wealth per adult This is a list of countries of the world by wealth per adult from Credit Suisse Credit Suisse Group AG is a global investment bank Investment is the dedication of an asset to attain an increase in value over a period of time. Investm ...
*
Economic inequality There are wide varieties of economic inequality, most notably measured using the distribution of income In economics Economics () is a social science that studies the Production (economics), production, distribution (economics), di ...


References


External links

* * {{DEFAULTSORT:High Net Worth Individual Distribution of wealth