A popular internet meme illustrating the rising cost of housing displays an image of a palatial estate next to an image of an ordinary home. The corresponding captions read, “what I thought a million-dollar house looked like” and “what a million-dollar house actually looks like.”  The purchasing power of money shifts over time, as do the thresholds for net worth and what is considered “wealthy”. In 1980, having $300,000 might have qualified an individual or household as high net worth.  But in 2025, the bar is markedly higher, and the expectations more complex.

Being a high-net-worth individual (HNWI) is no longer just a status—it defines unique financial needs, opportunities, and risks.  For investors and advisors alike, employing strategies that address the specific concerns of this group and evolving trends in wealth management are vital for maximizing growth and preserving savings.

Defining High Net Worth

In current financial standards, an HNWI is generally defined as an individual who holds at least $1 million in liquid (investable) assets, excluding their primary residence.

“Liquid assets” encompass cash or investments that can be readily converted to cash, like stocks, bonds, and mutual funds. Illiquid holdings, such as art or a primary residence, are typically excluded when determining HNWI status.

Beyond that base status level, wealth firms commonly break HNWIs into tiers:

• Very-High-Net-Worth Individuals (VHNWIs): Those with liquid assets valued between $5 and $30 million.
• Ultra-High-Net-Worth Individuals (UHNWIs): Individuals holding more than $30 million in liquid assets.

These tiers enable wealth managers and private banks to tailor service levels, access, and investment structures to match the complexity and scale of clients’ portfolios.  However, regulatory definitions can differ; for instance, under the U.S. SEC’s Form ADV rules, some advisors report clients with $750,000 of investable assets, or a net worth of $1.5 million, as “high net worth” for reporting purposes.

The Size and Growth of the High Net Worth Individual Cohort

The global population of HNWIs continues to expand following record highs in 2023. Here are some recent statistics:

• In 2024, the global HNWI population rose by 2.6%, driven by gains in the UHNWI segment. North America saw the strongest growth.
• The UHNWI population globally (those above $30 million) grew about 6.2%
• The U.S. added about 562,000 new millionaires, bringing its total to approximately 7.9 million HNWIs, who primarily reside in states like California, Texas, New York, Florida, and Illinois. 
• New York City is home to 384,500 HNWIs.

These figures reflect not just more people crossing wealth thresholds, but also appreciation in existing portfolios, especially from equity markets, technology valuations, and alternative assets. 

Challenges Facing High Net Worth Individuals

Accruing wealth is one thing; holding onto it is another. HNWIs encounter several threats to their savings, including:

• Tax Law Changes: The current federal estate tax exemption is set at $13.9 million per individual, and $27.9 million for married couples. Under the One Big Beautiful Bill Act (OBBBA), it rises to $15 million per person and $30 million per married couple in 2026 (indexed annually for inflation).  A 40% federal estate tax applies above these thresholds, underscoring the need for proactive estate and gifting strategies.
• Market Volatility: Market fluctuations and economic uncertainty can erode wealth. However, a diversified investment portfolio and risk mitigation strategies can cushion the impact and even show growth in an unstable financial landscape.
• Advisor Shortage: The financial industry is experiencing a talent shortage, as seasoned professionals retire and fewer young advisors enter the field. According to McKinsey & Company, the industry could face a shortfall of 100,000 advisors over the next decade. Luckily, many firms are modernizing recruitment and embracing new technology to meet the demands of HNWIs today.  HNWIs should seek out and establish a lasting relationship with a qualified professional to navigate the complexities of their assets across changing financial climates.
• Family Legacy and Wealth Transfer: Over the coming decades, trillions will transfer across generations. Ensuring that future heirs are equipped, aligned, and protected is a growing priority in HNW wealth planning.

Planning Opportunities for High Net Worth Individuals

While challenges like tax law changes, volatility, and advisor shortages create complexity, they also present valuable planning opportunities.  For clients in their peak earning years, a financial advisor can review retirement plan options, deferred compensation programs, and other workplace benefits to help ensure tax-advantaged savings. Strategic use of 401(k) catch-up contributions, back-door Roth IRAs, and health savings accounts (HSAs) can all help reduce taxable income today while building future flexibility.

Estate and legacy planning also benefit from proactive action. Lifetime gifting, irrevocable trusts, and charitable giving strategies can efficiently shift wealth across generations while protecting assets from estate tax exposure. In addition, diversifying portfolios with alternatives such as private equity, real estate, or private credit can offer growth potential and mitigate risk in uncertain markets.

“High net worth” today implies a dynamic suite of expectations, challenges, opportunities, and diverse financial objectives. This client base is growing, more sophisticated, and increasingly savvy.  Significant wealth requires elevated strategies beyond simple asset accumulation to integrated, multi-faceted stewardship of capital across generations.

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