Ultra high-net-worth individual

Ultra high-net-worth individuals (UHNWI) are defined as having a net worth of at least US$30 million in constant 2018 dollars.[1][2] It is the wealth segment above very-high-net-worth individuals (>5 million) and high-net-worth-individuals (>1 million). Although they constitute only 0.003% of the world’s population, they hold 13% of the world's total wealth.[3] By 2017 there were 226,450 individuals designated as UHNWI representing an increase of 3.5% with their combined total wealth increasing to $27 trillion.[4]

Definitions and ranking

Ultra High Net Worth Individuals are defined as having a net worth of at least US$30 million in investable assets net of liabilities (after deducting residential and passion investments such as art, planes, yachts and real estate). At per the last count, there were 211,275 UHNW individuals in the world, with a total combined net worth of US$29.7 trillion.[5][6] Billionaires are a special category of UHNW individuals, having net worth in excess of US$1 billion. According to the Billionaire Census 2014, there were 2,325 billionaires in the world, with a combined net worth of US$7.3 trillion.[7] In 2014, these individuals represented just over 1% of the world's UHNW population and 24% of the world's UHNW total wealth. The June 27, 2017 "World Ultra Wealth Report" analysed the state of the world’s ultra high net worth (UHNW) population, or those with $30m or more in net worth. The number of UHNW individuals globally grew 3.5% to 226,450 individuals. Their combined total wealth increased by 1.5% to $27 trillion.[4]

Reports

The "World Ultra Wealth Report", on ultra high net worth (UHNW) populations - those with “$30m or more in net worth”, which was published on June 27, 2017, - “this year revealed global growth of 3.5% to 226,450 individuals and a 1.5% increase of their total combined wealth to $27 trillion.”[4]

World Ultra Wealth Report

The World Ultra Wealth Report 2013 was co-published by Wealth-X and UBS. The fifth edition of the report was published in June 27, 2017.[4] Previous World Ultra Wealth Reports were published independently by Wealth-X, in 2011 and 2012 respectively.

UHNW distribution by wealth tier[8]

World UHNW20132013201220122012–20132012–2013
Net worthUHNW populationTotal wealth US$ billionUHNW populationTotal wealth US$ billionPopulation change %Total wealth change %
$1 billion +2,1706,5162,1606,1900.5%5.3%
$750 million to $999 million1,0809299908559.1%8.7%
$500 million to $749 million2,6601,6952,4751,5607.5%8.7%
$250 million to $499 million8,6953,4208,0903,2257.5%6.0%
$200 million to $249 million14,1853,20513,5003,0355.1%5.6%
$100 million to $199 million23,8353,78022,2903,3356.9%13.3%
$50 million to $99 million60,7604,72056,2054,2958.1%9.9%
$30 million to $49 million85,8503,50581,6703,2805.1%6.9%
Total199,23527,770187,38025,7756.3%7.7%

Boston Consulting Group Global Wealth Report

The Global Wealth Report,[9] which Boston Consulting Group (BCG) published in June 2014 in Washington, D.C., shows that liquid wealth of the super-rich, the Ultra-High-Net-Worth Households, has increased by 20% in 2013. BCG uses a household definition of UHNW which places only those with more than $100 million liquid financial wealth into the UHNW-category, more than the usual $30 million, with which the ultra-category had been created in 2007. According to BCG about 15,000 households globally belong in this group of the super-rich. They control 5.5% of global financial wealth. 5000 of them live in the US, followed by China, Britain and Germany. BCG expects the trend toward more concentrated wealth to continue unabated. While financial wealth of the sub-millionaires is expected to increase by 3.7% annually until 2019, the expected growth rate for the super-rich is 9.1%. The share of this group in global financial wealth would thus increase % to 6.5% by 2019.[10]

UHNW characteristics

By 2013, 65% of the world's UHNW population was self-made, as opposed to 19% who had inherited their fortune and 16% who had inherited and grown their wealth. These proportions change dramatically by gender. In the 2013 report, it was revealed that only 12% of the world's UHNW population is female, and of these, only 33% are self-made, as opposed to 70% of male UHNW.[11] According to the same 2013 report, twenty-two percent of self-made UHNW individuals have derived their wealth from the finance, banking and investment. Almost 15% of individuals with inherited wealth are engaged in non-profit and social organisations.[12]

Asia's growth is expected to continue,[13] and this change in demographics has significant impact on the various organizations that specifically target UHNW individuals, such as luxury companies, financial institutions, charities and universities.

Largest UHNW Population, 2016
Source: Wealth X[14]
CountryUHNW Population
 USA73,110
 Japan16,740
 China16,040
 Germany13,420
 United Kingdom8,860
 France8,630
 Canada8,590
 Hong Kong7,650
  Switzerland5,940
 Italy5,530
Largest UHNW Population, 2016
Source: Knight Frank[15]
CountryUHNW Population
 USA68,990
 China14,310
 United Kingdom9,470
 Germany8,750
  Switzerland7,140
 Japan6,840
 India6,740
 Canada4,110
 Hong Kong4,080
 Australia3,340

Billionaire Census

The Billionaire Census 2013 was co-published by Wealth-X and UBS.

The average net worth of the world's billionaire is US$3 billion, with a liquidity on average of 18% of net worth.[16] 60% of the world's billionaires are self-made, 20% have inherited their fortune and 20% have both inherited and grown their wealth. 18% of the world's billionaires have derived their wealth from finance, banking and investment; as opposed to 9% from industrial conglomerates and 7% from the real estate industry.[16] The average billionaire is 62 years old, and 87% of the world's billionaires are male. Approximately 68% of them have a bachelor's degree or higher levels of education.[16]

UHNWI Role in Economies : Civic Stewards and Consumers

UHNW individuals are of crucial importance not only to the finance, banking and investment industry, but also to luxury companies who target UHNW individuals, charities, universities and schools amongst others. UHNW individuals are notable players in the field of philanthropy; many of them have their own private foundations and support a variety of causes, from education to poverty relief.

Financial institutions are known for their targeting of UHNW individuals, having specific parts of their bank designed to manage the wealth of their UHNW clients.[2] In addition, research on the UHNW is particularly important with upcoming intergenerational wealth transfers in the UHNW population.[17] For example, luxury companies typically target UHNW as a separate segment of their clientele. Projected growth in UHNW population in Asia may hold promise for the future of the luxury industry.[18] In fact, even despite wide report on the luxury industry's troubled year with China's luxury spenders, luxury industry experts continue to be optimistic for their long-term performance, especially from UHNW individuals.[19] In the real estate sector, UHNW individuals are particularly relevant, with the total UHNW population's real estate holdings accounting for over US$5 trillion, or 3% of the world's real estate holdings. This is a huge proportion considering this population is only 0.003% of the world's population.[20]

See also

References

  1. ↑ Wealth-X and UBS. World Ultra Wealth Report 2013.
  2. 1 2 Grzeskiewiecz, Grzegorz; Tomasz Kozlinski (15–17 June 2004). "High Net Worth Individuals - The Clients of Private Banking" (PDF). 8th International Conferenec of Doctoral Students. Brno University of Technology (Czech Republic).
  3. ↑ Staff, Investopedia (2013-08-30). "Ultra High Net Worth Individual (UHNWI)". Investopedia. Retrieved 2017-10-27.
  4. 1 2 3 4 "The World Ultra Wealth Report 2017". Exclusive UHNWI Analysis (5 ed.). June 27, 2017. Retrieved November 12, 2017.
  5. ↑ "World's Ultra Wealthy Population Reaches All-Time Record". WSJ Online. September 10, 2013.
  6. ↑ Wealth-X and UBS. World Ultra Wealth Report 2014. p. 15.
  7. ↑ Wealth-X and UBS. Billionaire Census 2014. p. 14.
  8. ↑ Wealth-X and UBS. World Ultra Wealth Report 2013. p. 17.
  9. ↑ "Global Wealth 2014: Riding a Wave of Growth". https://www.bcg.com. External link in |website= (help)
  10. ↑ BCG: Global Wealth 2014, Riding a Wave of Growth, The Boston Consulting Group, 9.6.2014
  11. ↑ Wealth-X and UBS. World Ultra Wealth Report 2013 (Report). pp. 20–25.
  12. ↑ Wealth-X and UBS. World Ultra Wealth Report 2013. pp. 20–25.
  13. ↑ Fox, Jeff (2014-02-15). "Helping the rich to become $100 trillion industry". CNBC.
  14. ↑ "Exclusive UHNWI Analysis: World Ultra Wealth Report 2017". Wealth-X. 2017-06-27. Retrieved 2018-08-20.
  15. ↑ "Wealth Report 2017 - Download". www.knightfrank.com.
  16. 1 2 3 Wealth-X and UBS. Billionaire Census 2013. p. 84.
  17. ↑ Foster, Lauren. "Why Financial Advisers Need to Use Social Media". Retrieved 2014-03-06.
  18. ↑ Kelesidou, Fani (5 March 2014). "Why High-End Luxury Brands Are Losing Their Luster". Daily Finance.
  19. ↑ PTI (5 March 2014). "Luxury industry optimistic about January–March quarter: Wealth-X survey". India Times: Economic Times.
  20. ↑ Savills and Wealth-X (2014). Around the World in Dollars and Cents (PDF). p. 2.
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