What it means
Financial firms divide clients into tiers. The mass market covers most savers, the affluent have higher incomes and savings, high net worth individuals typically hold at least $1,000,000 in investable assets, and ultra high net worth is the top tier with a threshold that most firms set at around $30,000,000.
The cut-off differs by source, and some private banks use their own higher limits, so you should always check which definition is in use. Some measures include property and business ownership, while others count only liquid investments.
At this level of wealth, financial needs become complex. Clients often have interests in private companies, real estate in several countries, art and collectibles, family trusts and philanthropic plans, and they need advice that coordinates tax, legal, investment and succession issues.
Services for UHNWIs typically include a dedicated relationship team, bespoke investment portfolios, access to private equity and hedge funds, and family office support. Lending is also common, with credit lines secured against investment portfolios or property.
A family office is a private company that manages the wealth and affairs of one or more wealthy families. For businesses, the segment is important as a market.
Banks, insurers, luxury brands and charities all design products and approaches for these clients, and they track the population as a gauge of economic health. Wealth reports published by research firms estimate how many UHNWIs there are in each country and how fast the group is growing.
There are also risks and responsibilities. Firms serving this group must carry out strong checks on the source of wealth to prevent money laundering, and clients face unique exposures such as concentrated holdings in a single business and reputational and security risks.
Advisers therefore pay close attention to diversification, privacy and cyber security.
In practice
Real-world examples.
Example
A private bank sets up a team for clients with at least $30,000,000 in assets. One client sold his software company for $90,000,000 and wants to invest the proceeds in a mix of bonds, shares and private investments. The bank assigns a specialist to coordinate tax planning and a trust structure. The client also receives regular reviews with the whole team present.
Example
An art insurer designs a policy for a collector with a $15,000,000 collection spread across three homes. The collector is part of a family with a net worth well above the UHNWI threshold. The policy includes specialist cover for transport, exhibitions and storage. A valuer re-appraises the collection every few years so that the insured amount keeps pace with market prices.
Example
A university fundraising officer prepares a proposal for a potential donor who qualifies as a UHNWI. She proposes a named scholarship fund requiring a $5,000,000 gift, structured over five years. She chooses this approach because the donor prefers a long-term legacy to a single donation. The university's lawyers draft a gift agreement that sets out how the money will be used.
Case study
Seen in the real world.
Marlowe Family is a fictional household, and this is an illustrative example. After selling a manufacturing business for $120,000,000, the family became UHNWIs overnight and found that their previous adviser could not meet their new needs.
They hired a multi-family office, a firm that serves several wealthy families together, to manage their affairs. The office created a plan that placed $60,000,000 in diversified public investments, $20,000,000 in private equity and real estate, and $10,000,000 in a charitable fund, with $30,000,000 held as liquid reserves and for family spending.
Most importantly, the office worked with lawyers to set up trusts and a succession plan to cover the next generation. The illustrative case shows that wealth at this level is as much about structure and governance as it is about investment returns. The family also agreed to meet the office each quarter, and to hold an annual family meeting where the next generation learns how the money is managed.
Watch out
Common mistakes.
- Assuming one universal definition. The threshold varies between banks and research firms, so confirm which one is used.
- Counting only investment returns. For UHNWIs, tax, succession, legal structures and risk management matter just as much.
- Treating the population as a single type. UHNWIs include entrepreneurs, inheritors and executives, whose needs differ widely.
Questions
People also ask.
What is the usual UHNWI threshold?
It is commonly set at $30,000,000 of net worth or investable assets, though some firms use different figures.
How is it different from a high net worth individual?
High net worth usually starts at around $1,000,000 in investable assets, which is far lower than the UHNWI level.
Do UHNWIs need a family office?
Not all do, but many use one or a multi-family office to coordinate their investments, tax and legal affairs.
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