Ultra-high net worth families — UHNW families — are the wealthiest families on the planet and include all the world’s billionaires. These families sit significantly above high net worth families. According to various studies, the number of ultra-high net worth individuals is constantly growing, and there’s an ongoing shift in their demographics. If you’re one of these individuals, your wealth should be well over $5 million, so you can certainly benefit from our guide titled 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
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For UHNW families, managing so much wealth on their own can be a challenge. If you find yourself in a similar situation, consider connecting with Pillar Wealth Management, a high-profile firm specializing in wealth management services for investors holding $5 million to $500 million in liquid assets.
Meanwhile, this guide will take a deep dive into UHNW families. Let’s begin with the question, “What are UHNW families?”
What Are UHNW Families?
When it comes to defining UHNW families, there’s no legal standard in the financial industry. Different countries and financial institutions have their own figures in mind for net values constituting UNHW benchmarks, but with minor differences in what’s considered UHNW (ultra-high net worth).
For many nations and organizations, UHNW families are those with liquid assets worth $30 million or more. Others, such as Pillar Wealth Management, consider those with $25 million in liquid assets as UHNW families. The classification for what’s considered UHNW is particularly important to wealth management firms and banks because they use the distinction to create relevant products to target the right clients.
It’s important to pay particular attention to the word “liquid” in the aforementioned definition. This means that it isn’t enough to hold over $25 million or $30 million of net worth on paper. Those funds should also be available for investing. For example, funds tied up in one or more businesses or real estate assets are not normally readily available, so they would not count as liquid assets, which have to be money in the bank or brokerage accounts.
Similarly, the term “net” is of critical importance here. It highlights the fact that to achieve the status of UHNW families, all the debts or liabilities should have been deducted from their assets before reaching this figure. To learn more about what constitutes an UHNW family, schedule a video consultation with our wealth managers at your earliest convenience.
When studying UHNW individuals, you may also want to know who is considered a high net worth individual (HNWI). Again, there are variations in the definition of HNWIs across countries and organizations. Some consider households or families with liquid assets valued over $1 million as HNWI, while for others, like Pillar Wealth Management, the threshold is $5 million.
Given their substantially high net worth, both HNWIs and UHNW families require services from wealth managers and financial advisors. Financial services include financial planning, tax advice, and investment management, help with estate planning and trusts, and access to private equity firms and hedge funds, and more.
The higher the value of the liquid assets held by UHNW families or individuals, the more appealing they become to wealth managers. This is because many of them charge a pre-specified percentage of the value of assets they manage as their fee. Plus, certain wealth management firms and banks specify account minimums that make clients eligible for their services or for more specialized and personal client services. If you’re a high net worth individual with more than $10 million, this comprehensive guide is for you! To learn more about high net worth individuals, schedule a video consultation with our wealth managers.
Now that you have a fair idea about both ultra-high and high net worth individuals, let’s take a look at some of the statistics pertaining to ultra-high net worth individuals:
The supply chain disruptions and geopolitical tensions that stemmed from the pandemic have not stopped the ultra-high net worth population from growing fast. Between 2020 and 2021, the number of ultra-high net worth individuals increased by 9.3%.
In 2021, North America had the largest number of ultra-high net worth individuals at 230,000 with Asia following closely with 170,000 UHNWIs. In these continents, the population of the UHNWIs increased by 12.2% and 7.2%, respectively. After the top two performers, the next top performers were in Europe, where the number of UHNWIs in 2021 is detailed as follows:
|Country||Number of UHNWIs in 2021|
When evaluated on a per capita basis, the country with the highest number of UHNWIs and UHNW families in the world in 2021 was found to be Monaco, with 5 people for every 1000 residents. The second-fastest growth of UHNWIs, at 11.2%, occurred in Russia and the CIS. This growth is attributed to rebounding stock market valuations and oil and property prices. But this oligarchy wealth can be easily impaired by the economic fallout and crippling sanctions resulting from Russia’s Ukraine invasion.
By 2026, the UHNW population is expected to rise by a staggering 28%, although the growth from 2016 to 2021 was around 75%. Asia is set to have the highest growth rate of 33%, with China’s ultra-rich population projected to rise by 42% and that of Singapore by 268%. The number of UHNWIs and UHNW families in North America is expected to reach 300,000 or grow by exactly the same proportion of 28%, by 2026. Latin America is also projected to experience significant growth. Argentina, in particular, might see an expansion of 38% amid rampant hyperinflation.
You’re probably wondering what’s causing this increase in UHNWIs around the world. The two biggest drivers behind the trend are the real estate boom and sky-high asset prices. On top of that, the sharp drop in interest rates during the pandemic further accelerated the drift. With low borrowing costs, UHNW families can invest more in financial assets, acquire more property, and so on. This means they have more leverage to boost their wealth. Regardless of your location, if your wealth exceeds $5 million, be sure to study our guide titled 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning.
5 Key Insights into UHNW Families
The University of Pennsylvania’s Wharton School released a study right before the beginning of 2022. Known for its groundbreaking research in finance and wealth management, the institution found that ultra-high net worth families and individuals think differently from most other people about investment, risk, and risk management.
- The majority of UHNW families view their wealth holistically, which means they have multiple factors in mind, including liquid financial assets and human capital, tangible non-financial assets, and business operations assets, which combine to make a comprehensive picture of the total wealth of their family.
- Most wealth managers that target UHNW families focus exclusively or largely on risks and returns of financial investments such as stocks, private equity, and bonds. However, the study reveals that UHNW individuals also want the wealth management firms they hire to view their tangible assets as part of their investment plans. Over 87% of the UHNW respondents from the study reported viewing tangible assets as part of their wealth. In contrast, only 53% of the financial advisors regarded those assets in a similar class.
- Moreover, 80% of the UHNW respondents with over $30 million in wealth, and 95% of those with $50 million in wealth, prioritize service and coverage over price. Speaking of insurance, the top priority for UHNW individuals is to have an insurance carrier with a strong, financially stable balance sheet, along with the ability to handle complex situations.
- According to the same research, property coverage and liability insurance modeled over a 40-year period can enhance the risk-adjusted return on assets of balance-sheet portfolios that cover a family’s property, possessions, and business.
- Other than that, ultra-high net worth families understand that they face complex and constantly changing risks, so they seek guidance on coordinating their assets and risks from advisors, insurers, and others who understand the complexity of their wealth.
Hence, it’s no wonder that most ultra-high net worth families have a wide network of finance professionals such as attorneys, wealth managers, advisors, and accountants. To ensure that these clients are more holistically covered, financial advisors should consider working with insurance carriers, agents, and brokers that specialize in ultra-high net worth clients. To learn more about the networks of ultra-high net worth families, schedule a video consultation with our wealth managers.
What It’s Like to Be an UHNW Individual or Family
If you’re a high net worth individual aspiring to be an ultra-high net worth individual, you may want to know how you’d feel after getting there. According to a survey conducted by the Boston Private, a large number of ultra-high net worth individuals believe that wealth brought them happiness and peace of mind. Although money cannot directly provide you with success, happiness, and contentment, it can provide you with a lifestyle that makes you more satisfied.
In addition to offering intangible psychological and emotional benefits, wealth provides you with the freedom to pursue whatever you want, engage in any leisure and social activities, travel extensively, and lead a happy family life.
For many UHNW families, being among the richest is all about being your own boss. Many such individuals left their full-time jobs to launch their own business, which ultimately paid off.
For some people, the drive to become an UHNWI has to do with creating the change they wish to see in the world. According to them, acquiring ultra-high net worth should put them in a much better position to be a force for change.
However, accumulating an enormous amount of wealth may also bring regrets. Some UHNWIs strongly feel they owe an emotional debt to their families because they didn’t provide their spouses and children with the quality time they deserved. For others, the regret is associated with not being able to pursue their dreams and passions or seeking higher education, for instance.
Hence, if you’re working to become an ultra-high net worth individual, don’t miss out on the opportunities to pursue things you truly want to do in life, nor should you deprive your family of the quality time they deserve, such as vacationing and regular outings. This way, you’ll ultimately be happier as an ultra-high net worth individual or family. Currently, if you’re a high net worth individual with over $5 million in liquid assets, our guide titled 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning should give you a head start in reaching UHNW status.
By now, you should have an in-depth understanding of UHNW families. Not only do you understand the definition of UHNW families, their counterparts, and high net worth individuals, you also learned detailed stats about their spread across the world, and their mindset. If you’re an UHNW family or individual looking for more efficient ways to manage your wealth, reach out to Pillar Wealth Management, which services the richest investors with $5 million to $500 million in liquid assets. To get high-quality advisory services, schedule a video consultation with our wealth managers today!
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