Having a high net worth does come with its own set of challenges, one of which is the effective management of your money. While there are basic principles to help guide your high-net-worth wealth management strategy, there are specific actions you might want to take to try to grow your fortune.A financial advisor can also help you create a financial plan for your future.
High Net Worth Definition
A high-net-worth individual must have liquid financial assets of at least $1 million. Liquid in this case means able to be accessed – relatively quickly – as cash. Owning a home with a value of $1 million, for instance, would not qualify someone as a high-net-worth individual by itself, because that can’t be easily converted to cash and used for investment.
There are two levels above this: a very-high-net-worth individual has at least $5 million in liquid assets, while an ultra-high-net-worth individual has at least $30 million.
At an individual level, becoming a high-net-worth individual doesn’t impact you that much. To a potential financial advisor, though, you will be counted separately for the purpose of SEC filings.
Common Services for High-Net-Worth Individuals
There are some financial planning services that everyone needs, regardless of your financial situation. That said, there are some things that are especially important for those with a high-net-worth. Here are four services to look for in an advisor if you’re a high-net-worth investor:
Estate planning:Estate planning is important for everyone, but it takes on a special resonance for those with a lot of money because they’ll likely end up with a sizable estate that they want dealt with efficiently after they pass. This financial planning servicecan help you take the right steps now so that your money and assets are divided up as you see fit after you’re gone. And in a way, that minimizes the tax burden and the work needed from your family.
Charitable giving:Giving money to charity is great no matter how much you can give. Even donating $10 to a cause you believe in can give you a solid rush of endorphins and help out people who need it. When you have a high net worth, though, charitable giving grows in both scope and importance. You have more money to give, so it becomes important to be intentional and careful how and when you give it. Furthermore, charitable giving can be deducted on your tax return, so making sure you keep diligent records is important.
Tax planning: Everyone has to deal with taxes. But for those with a high net worth to manage, tax planning is also a crucial part of investing. This financial planning servicecan help high-net-worth individuals save money on their tax bill by maximizing deductions, selling investments for the purpose of tax-loss-harvesting and other engaging in other tax-saving strategies for high-income earners.
Succession planning:If you’re a small business owner or have a successful family business, succession planning is an important part of financial planning. This is a contingencyplan that can replace your leadership and maintain the right balance of experience and institutional knowledge for the success of the business and your family.
Bottom Line
A financial advisor can be useful for all people, but it is especially important for those who need high-net-worth wealth management. If you have a high net worth, an advisor can help you with investments, obviously, but also with taxes, estate planning and other concerns especially relevant to those with a lot of money.
High-Net-Worth Wealth Management Tips
- A financial advisor can be helpful for those with a high net worth, and finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you canhave a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- No matter how much money you have, it’s important to make sure you have a strong portfolio. Use SmartAsset’s asset allocation calculator to start planning.
Photo credit: ©iStock.com/g-stockstudio, ©iStock.com/Darren415, ©iStock.com/EXTREME-PHOTOGRAPHER
FAQs
High Net Worth Definition
A high-net-worth individual must have liquid financial assets of at least $1 million. Liquid in this case means able to be accessed – relatively quickly – as cash.
What is considered high net worth for wealth managers? ›
High Net Worth Definition
A high-net-worth individual must have liquid financial assets of at least $1 million. Liquid in this case means able to be accessed – relatively quickly – as cash.
How many people have $3000000 in savings? ›
There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more.
What net worth is considered upper class? ›
The upper class has an average net worth of $793,120 to $2.65 million, while the lower class has $16,900. The middle class ranges from $58,550 to $300,800. You can grow your net worth by saving and investing consistently, investing in the stock market, and being careful about taking on debt.
Where does the net worth of 3.5 million rank? ›
The 95th percentile, with a net worth of $3.2 million, is considered wealthy, facilitating estate planning and possibly owning multiple homes. The top 1%, or the 99th percentile, has a net worth of $16.7 million and represents the very wealthy, who enjoy considerable financial freedom and luxury.
Is $20 million a high net worth? ›
The management consulting firm Capgemini separates the HNWI population into three wealth bands: Millionaires next door, who have $1 million to $5 million in investable wealth. Mid-tier millionaires with $5 million to $30 million to invest. Ultra-HNWIs, who have more than $30 million4.
What percentile is $5 million net worth? ›
Americans need $5 million in net worth to join the 1% | Fortune.
What's the net worth of the top 2%? ›
Sign up for Kiplinger's Free E-Newsletters
- People with the top 1% of net worth in the U.S. in 2025 will have $11.6 million in net worth.
- The top 2% will have a net worth of $2.7 million.
- The top 5% will have $1.17 million.
- The top 10% will have $970,900.
- The top 50% will have $585,000.
According to the MacroMonitor, by 2022-23, the number of U.S. households with $3 million or more in financial assets represents 3.2% of all households, totaling 4.6 million.
What is a good net worth at age 65? ›
Key Takeaways. Net worth is the difference between the values of your assets and liabilities. The average American net worth is $1,063,700, as of 2022. Net worth averages increase with age from $183,500 for those 35 and under to $1,794,600 for those 65 to 74.
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
What net worth is considered affluent? ›
Charles Schwab's annual Modern Wealth Survey shares its insights for 2022. In the U.S. overall, the survey says it takes a net worth of $2.2 million to be considered wealthy, up from $1.9 million in 2021.
What net worth is considered elite? ›
There is another level of financial elite within the 1% called ultra-high net work individuals, or UHNWI. In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd.
Does net worth include home? ›
Household wealth or net worth is the value of assets owned by every member of the household minus their debt. The terms are used interchangeably in this report. Assets include owned homes, vehicles, financial accounts, retirement accounts, stocks, bonds and mutual funds, and more.
What net worth puts you in the top 1 percent in US? ›
You need more money than ever to enter the ranks of the top 1% of the richest Americans. To join the club of the wealthiest citizens in the U.S., you'll need at least $5.8 million, up about 15% up from $5.1 million one year ago, according to global real estate company Knight Frank's 2024 Wealth Report.
What percentage of retirees have $3 million dollars? ›
Specifically, those with over $1 million in retirement accounts are in the top 3% of retirees. The Employee Benefit Research Institute (EBRI) estimates that 3.2% of retirees have over $1 million, and a mere 0.1% have $5 million or more, based on data from the Federal Reserve Survey of Consumer Finances.
What net worth is considered very wealthy? ›
While having a net worth of about $2.2 million is seen as the benchmark for being rich in America, it's essential to remember that wealth is a subjective concept. Healthy financial habits and personal perspectives on money are crucial in defining and achieving wealth.
How much money should you have to get a wealth manager? ›
Any minimums in terms of investable assets, net worth or other metrics will be set by individual wealth managers and their firms. That said, a minimum of $2 million to $5 million in assets is the range where it makes sense to consider the services of a wealth management firm.
What is considered high net worth at Fidelity? ›
Relatively few embrace working with multiple advisors (13%) or any individual advisor managing other advisors (quarterback approach, 5%). those with $1 million to $5 million in investable, non-retirement assets, and ultra-high-net-worth are investors with over $5 million in investable assets.
What net worth is considered ultra rich? ›
What Constitutes Being an Ultra-High-Net-Worth Individual? While there's no legal standard when it comes to defining who is an ultra-high-net-worth individual (UHNWI), they're often defined as those who have $30 million or more in assets.
