Why HNIs are so important to private wealth managers
Wealth management and high net worth individual – these two terms are highly interrelated. Simply put, wealth management service is rendered to high net worth individuals. Now if you aim to be a wealth manager or a financial advisor in a branded private wealth management company, the first task is to know -what HNI (High Net worth Individual) signifies and why it is important for you to concentrate on them?
HNI is a person who has large personal financial holding. Traditionally we used to name them Millionaire, but in recent years they are professionally known as HNI. Usually an individual having financial worth more than $1 million can be called as HNI.
Now what this High net worth implies in effect? The answer is your financial asset minus real estate. This valuation structure makes much difference in the number of people who can be classified as high net worth individuals. There are good numbers of people who have real estate included as assets and the part is worth excess a million dollars.
Therefore a new category has come up called ultra-high net worth individuals (UHNWIs). Generally these are the people who have assets in excess of $30 million. Only 1% of global population come into this category.
Though with diminishing dollar value against many other foreign country currencies, the definition of HNI has reduced to some extent, but from a wealth manger’s point of view the person is always important as a potential investor cum client.
Why HNIs are always on spot light?
Money matters for everyone for every reason. If you want to be an established portfolio manager or a wealth manager, you need to identify your client’s financial potential and the reason for him to invest in the market. Since private wealth management is purely a high value service conceptualized on reliability, experience and forecasting ability of a consultant, you need to find enough reasons before choosing a millionaire as your client.
HNIs are the targeted wealthy people who might be interested to your investment planning idea. Not all but many of them are equipped with good amount of money at their disposal. So it might be easier to convince them to go for profitable investment schemes.
In addition, most of the high nets worth individuals are so busy with their multi-business schedules that they can not afford much time to regulate their financial matters. In such cases importance of wealth management companies is rightfully understood.