![]() Accredited investors have access to special securities, such as private equity and hedge funds. The SEC also defines most HNWIs as “ accredited investors.” These individuals are legally defined as investors with an annual income of at least $200,000 in each of the past two years ($300,000 for joint income), or a net worth of at least $1 million, excluding the value of their personal residence. You’d need at least $5 million in liquid assets to be a “very-high-net-worth individual.” And to be at the top of the top, or “ ultra-high-net-worth,” you would need at least $30 million in liquid assets. With $1 million, you’d only be high-net-worth. While having $1 million in liquid assets would make most people happy, being an HNWI is not the pinnacle as far as the financial world is concerned. These may include real estate investments, vehicles, land and more. Most financial institutions won’t allow you to factor in assets that are harder to liquidate. So if you’re trying to see if you’re high-net-worth, you can usually count the following liquid assets: This means cash you have at hand or assets you can easily sell for cash with little or no diminishment of its value. However, the general consensus is $1 million in liquid assets. ![]() Still, there is no multi-industry level of wealth you have to reach to be an HNWI. HNWIs may also receive customized financial planning advice around complex topics like estate planning and charitable giving. These firms can allocate client assets across different model portfolios, including actively managed ones not available to clients with smaller investable asset levels. Indeed, some wealth management firms work exclusively with HNWIs or provide them with extra services. Of course, financial advisors also identify their HNWI clients so they can cater services to their specific needs. To do that, they define them as having $750,000 in investable assets or a $1.5 million net worth. Advisors who are registered with the SEC must annually report how many HNWI clients they have. For example, a credit card company can offer HNWIs an invitation-only card with such perks as 24-hour concierge service, unlimited spending and luxury hotel upgrades.įinancial advisors also categorize their clients as high-net-worth or not. The “high-net-worth individual” term is primarily used by the financial services industry to designate the richest clients for exclusive services. Definition of a High-Net-Worth Individual ![]()
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