How are high-net-worth individuals classified in wealth management?

High-net-worth individuals (HNWIs) are primarily classified in wealth management based on their investable assets, which typically exceed $1 million. This threshold is significant because it indicates a level of wealth that allows individuals to engage in more sophisticated financial planning, investment opportunities, and access to exclusive financial products and services. HNWIs often require tailored wealth management services that address their complex financial needs, including estate planning, tax strategies, and investment management.

The focus on investable assets rather than income or property ownership is because wealth management is deeply concerned with available capital for investment purposes. While owning multiple properties or having significant business equity can indicate wealth, these factors do not necessarily reflect the immediate liquidity or investable capital that wealth managers consider when classifying individuals as high-net-worth. Additionally, the income level does not account for overall wealth or the ability to engage in various investment strategies. Thus, being categorized based on investable assets provides a clearer picture of an individual’s financial capacity in the context of wealth management.