High net worth individuals (HNWIs) are usually classified as those having investable assets that exclude primary residence, collectibles, consumables, and consumer durables worth $1 million or more.
Key Characteristics:
- Typically first or second generation entrepreneurs, executives, investors or inheritors of large fortunes.
- Significant incomes and wealth afford lavish lifestyles and complex financial planning needs to preserve assets.
Needs and Preferences:
- Prefer bespoke investment services and seek diversification across asset classes like private equity, art, and alternative investments.
- Value tailored advisory, family office services, asset protection, and philanthropic planning from financial institutions.
Significance:
HNWIs represent high-potential clients for banks but require customized solutions and high touch service given preference for discretion, control and specialized expertise in sophisticated products.
Catering successfully to HNWIs requires understanding their nuanced needs, risk tolerance, and sources of wealth. By delivering specialized yet personalized services, firms strengthen loyalty while accessing sizable pools of investable capital.