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Who is a high-net-worth individual?
There’s no universally accepted definition as to who fits the bill as a “high net worth” individual, especially in Australia.
Who is a high-net-worth individual?
There’s no universally accepted definition as to who fits the bill as a “high net worth” individual, especially in Australia.
A new white paper from Netwealth has considered the question in an attempt to piece together an answer to “who are the high-net-worth individuals?”
A number of sources do define a high-net-worth individual as an investor with more than $US1 million in liquid financial (or net investable) assets — excluding their primary residence, collectibles and consumables — but Netwealth has conceded “there is no universally accepted definition among Australian advice firms”.
Highlighting a number of different firms as holding different perspectives on the topic, the report commented that “perhaps the only common agreement among firms is that high-net-worth clients have investable assets at least in the millions rather [than] hundreds of thousands of dollars”.
Despite there being “only a partial consensus among financial advice professionals as to who, exactly, the high-net-worth individuals are”, Netwealth has reported that Australia now boasts around 266,000 high-net-worth individuals or HNWIs.
Together, this demographic controls around $2 trillion in investable assets.
Due to the lack of a core definition, it also becomes difficult “to generalise about what a typical high-net-worth individual is like in terms of their personality or their demographic, capital or geographic profile”, the report continued.
“Most wealth managers would likely attest that their high-net-worth clients are diverse with regard to their personal and social characteristics. HNWIs come in a range of ages, sexes, ethnicities and lifestyles.”
For one individual interviewed for the report, high-net-worth individuals mostly behave like other people, just with “bigger bank balances”.
“They are very much like the average Australian, but probably are more likely to have bigger houses, better cars and holiday more,” said William Buck’s Adrian Frinsdorf.
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