A high-net-worth individual (HNWI) is typically defined as someone with at least $1 million in liquid assets – cash or investments that can be quickly converted to cash. However, the U.S. Securities and Exchange Commission (SEC) sets slightly different thresholds for its Form ADV: $750,000 in investable assets or a net worth of $1.5 million. Financial institutions often offer HNWIs exclusive services, such as specialized investment accounts and wealth management advice. While some financial advisors focus exclusively on serving clients of high net worth, others may offer their services without any account minimums.
Whether or not you have a high net worth, consider working with a financial advisor to better manage your wealth and work toward your financial goals.
What Is a High-Net-Worth Individual?
A high-net-worth individual (HNWI) is someone whose financial assets – excluding their primary residence – place them in a distinct category within the wealth spectrum. The term typically applies to those with $1 million or more in liquid assets, but this threshold can shift depending on the institution or region.
Liquid assets are those that can be quickly converted into cash, such as stocks, bonds and other investments, unlike real estate or business ownership, which may be more difficult to sell quickly. If you’re trying to see if you’re high-net-worth, you can usually count the following liquid assets:
- Checking accounts
- Savings accounts
- Money market accounts
- Stocks
- Bonds, especially U.S. Treasuries
- Mutual fund shares
- Exchange-traded fund (ETF) shares
Banks, wealth managers and financial advisors often tailor services to meet the specific needs of these individuals, offering access to private banking, exclusive investment opportunities, and advanced tax planning strategies. For example, a credit card company can offer HNWIs an invitation-only card with perks like 24-hour concierge service, unlimited spending and luxury hotel upgrades.
What Do Financial Advisors Consider High-Net-Worth Clients?
Financial advisors also categorize their individual clients as high-net-worth or not. Advisors who are registered with the SEC must report how many HNWI clients they have when they file their Form ADV each year. To do that, they define these clients as those who have $750,000 in investable assets or a $1.5 million net worth.
Of course, financial advisors also identify their HNWI clients so they can cater services to their specific needs. Indeed, some wealth management firms work exclusively with HNWIs or provide them with extra services. These firms can allocate client assets across different model portfolios or build custom allocations based on the client’s unique needs. These portfolios may be actively managed and not made available to non-high-net-worth clients.
Clients with a high net worth may also receive customized financial planning advice around complex topics like estate planning, tax strategy and charitable giving. The level of personalization and expertise required by high-net-worth clients makes this segment a priority for many financial professionals, shaping how they structure their services.
Types of High-Net-Worth Individuals
Having $1 million in liquid assets is a significant milestone for many, but reaching this level of wealth does not necessarily place an individual at the highest tier in the financial world. HNWIs are typically classified into different wealth brackets. These distinctions allow financial professionals to fine-tune their services to meet the specific needs of clients at various wealth levels.
- Very-High-Net-Worth Individuals (VHNWIs): Individuals with liquid assets between $5 million and $30 million have what’s known as a “very high net worth.” This level of wealth opens doors to exclusive financial opportunities, including private equity and venture capital investments. VHNWIs tend to focus on more complex financial planning, such as detailed estate planning and strategic tax reduction methods.
- Ultra-High-Net-Worth Individuals (UHNWIs): These people have over $30 million in liquid assets and own significantly larger and more intricate portfolios. These may include international investments, private foundations and multiple real estate properties. Many UHNWIs work with family offices, which provide comprehensive teams of financial advisors, legal experts and investment managers to oversee all facets of their wealth management.
What’s an Accredited Investor?
High-net-worth individuals also typically qualify as accredited investors. An accredited investor is an individual or entity permitted to invest in private securities not registered with financial authorities, such as hedge funds, venture capital or private equity.
In the U.S., an individual can qualify as an accredited investor if they meet specific financial criteria, typically having a net worth of over $1 million (excluding their primary residence) or earning an annual income of at least $200,000 (or $300,000 jointly with a spouse) for the past two years.
For high-net-worth individuals, this accreditation offers access to a broader range of investment opportunities that are generally more complex, risky and illiquid. Accredited investors are considered financially sophisticated and able to handle the risks of these non-public investments without the regulatory protections offered to the general public.
This status allows high-net-worth individuals to diversify their portfolios with assets that might offer higher potential returns but come with greater risks.
High-Net-Worth Individuals by the Numbers
Globally, there are approximately 22 million high-net-worth individuals (HNWIs), according to the World Wealth Report 2024, a study from the French information technology and consulting firm, Capgemini.
The same study found that North America leads the world with the largest population of HNWIs, accounting for around 37% of the total, with the U.S. alone home to about 5.5 million HNWIs. Asia, meanwhile, is now home to nearly 7.4 million high net worth individuals, an increase of 4.8% from 2022.
As you might imagine, the U.S. has some of the most affluent individuals in the world. According to the 2024 Forbes 400, the five wealthiest Americans by net worth are Elon Musk ($244 billion), Jeff Bezos ($197 billion), Mark Zuckerberg ($181 billion), Larry Ellison ($175 billion) and Warren Buffett ($150 billion).
Bottom Line
Holding the title of “high-net-worth individual” can have its perks, but it’s a tough financial status to reach. Again, you’ll generally need at least $1 million in liquid assets or cash to be a HNWI. There are also tiers higher than HNWI, like ultra-high-net-worth and very-high-net-worth. Furthermore, the SEC has its own framework for identifying people with a high net worth. If you can make it into any of these groups, you’ll unlock numerous opportunities that aren’t available to most people.
Wealth Management Tips
- Preserving and growing your wealth and net worth takes time and skill. If investing is not in your wheelhouse, working with a financial advisor may help you navigate this unknown terrain, including tax and inflation concerns. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Before you can calculate whether you’re an HNWI or not, you’ll need to understand what net worth entails. Check out SmartAsset’s guide to net worth to learn more.
Photo credit: ©iStock.com/courtneyk, ©iStock.com/Dimensions, ©iStock.com/Georgijevic