High-Net-Worth Individual (HNWI): Criteria and Example

What Is a High-Net-Worth Individual (HNWI)?

A high-net-worth individual (HNWI) is someone with liquid assets of at least $1 million after accounting for their liabilities. Liquid assets held by HNWIs include cash and investments that can be easily liquidated or converted to cash, including stocks. HNWIs need and receive tailored financial and money management services due to their net worth.

Understanding High-Net-Worth Individuals (HNWIs)

High-net-worth individuals are people whose net worth meets a minimum threshold. While the amount often differs by financial institution and region, the generally accepted minimum is $1 million in liquid assets. This figure excludes the person’s primary residence and assets, such as fine art and antiques, which can be difficult to sell.

There are several ways to reach a high net worth. Working, saving, and making smart investments can lead to an increase in net worth. Other ways include inheriting a large sum, winning the lottery, selling a valuable asset or business, and receiving a settlement or life insurance payout.

HNWIs usually get more benefits than those whose net worth falls under $1 million. Most banks require customers to have a certain amount of liquid assets, a certain amount in depository accounts with the bank (or both) to qualify as an HNWI. If they do, they may get services with reduced fees, special rates, and access to investor events that are closed to most.

The more money a person has, the more work it takes to maintain and preserve those assets. These individuals may demand and can justify personalized investment management, estate planning, and tax planning services. They generally qualify for separately managed investment accounts rather than mutual funds.

Types of High-Net-Worth Individuals (HNWIs)

HNWIs can be divided into several different categories. Where they fall depends on how much they're worth:

• Sub-HNWI: An individual with more than $100,000 but less than $1 million
• Very-HNWI: An individual whose net worth is between $1 million and $5 million
• Ultra-high-net-worth individual (UHNWI): This is someone who has a net worth of at least $30 million.

Remember that a person's liquid assets are considered when calculating their net worth. As such, it excludes property like their primary residence, collectibles, and consumer durables.

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

North America had the highest concentration of HNWIs at the end of 2024, with about 8.4 million, according to Capgemini. The Asia-Pacific region followed with 7.6 million individuals. HNWIs in Europe totaled 5.7 million, while those in Latin America numbered 600,000. The Middle East had 900,000 HNWIs, and Africa had 200,000.

The total number of HNWIs worldwide increased by 2.6% from 2023 to the end of 2024, with North America experiencing the largest increase of 7.3%. The HNWI population had a total of $90.5 trillion in wealth.

The management consulting firm Capgemini separates the HNWI population into three wealth bands:

• Millionaires next door, who have $1 million to $5 million in investable wealth
• Mid-tier millionaires, with $5 million to $30 million to invest
• Ultra-HNWIs, who have more than $30 million

Globally, the ultra-HNWI population numbered 234,000 in 2024. That’s an increase of 6.3% from 2023. Mid-tier millionaires numbered 2.16 million, while the millionaires next door category made up the largest group, at 21.02 million.

Benefits Afforded to High-Net-Worth Individuals (HNWIs)

The benefits for high-net-worth individuals vary by financial institution and region. As an HNWI, you may qualify for banking, investment, and other financial services with reduced fees, discounts, and special rates, along with access to special events and perks.

HNWIs can invest in hedge funds, which are generally open only to accredited investors who meet certain criteria, including a minimum net worth. HNWIs may also invest in private equity (PE) and venture capital (VC) funds, which are not available to the general public.

The Bottom Line

A high-net-worth individual has liquid assets of at least $1 million. These individuals often seek the assistance of financial professionals to manage their money, and their high net worth qualifies them for additional benefits and investing opportunities that aren't available to most. HNWIs are in high demand by private wealth managers because it takes more work to maintain and preserve their assets.