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What Is High Net Worth for Financial Planning? Thumbnail

What Is High Net Worth for Financial Planning?

Financial planning is important for individuals with a high net worth, who might not know how to invest their liquid assets. With a net worth advisor, you would have a dedicated wealth management to determine the best investment opportunities for you, your family, and your business. High net worth wealth management will provide you the support you need to make your investments work for you.

At Delta Wealth Advisors, we want to educate our clients on their finances, so we can help make educated decisions with their goals in mind. In this blog, we will provide a high net worth individual definition, as well as talk about what different levels of wealth mean.

What Do Financial Advisors Consider High Net Worth?

High net worth in financial advising refers to the amount of liquid assets a client has available to invest. The lowest amount of assets to be considered high net worth is $1 million. The classifications of high net worth (HNWI), very high net worth (VHNWI) and ultra high net worth (UHNWI) individuals give wealth management advisors the ability to provide the right services that might not be offered to lower net worth individuals.

A high net worth individual (HNWI) is someone with a minimum net worth of $1 - 5 million in investable, liquid assets. With higher net worth comes better benefits, like separately managed investment accounts rather than standard mutual funds that non-HNWIs invest in. High net worth individuals typically need specialized assistance in areas like estate planning, tax preparation, and financial management. A wealth management advisor, like those at Delta Wealth Advisors, has experience in these services and dedicates their time to advise high net worth clients.

What Is Considered Very High Net Worth?

Very high net worth is considered to be between $5 million and $30 million of liquid assets available for investment. This means that very-HNWIs have access to more services, and typically better benefits, than sub-HNWIs or HNWIs. Because their assets equal much more than that of HNWI, it’s suggested that very-HNWIs find the right advisor for their assets and investments, who will do what is best for the portfolio and client.

What Is Considered Ultra High Net Worth?

Ultra high net worth is considered to be between $30 million and $999 million of liquid assets available for investment. This is the highest category of net worth below billionaires and UHNWI can be sure that wealth management services will cater to their needs. As advised above, ultra-HNWIs need to focus on finding a good fit with their advisor to do what’s best for their portfolio.

If you are a high net worth individual, you should consider hiring a high net worth wealth management advisor for your portfolio. Delta Wealth Advisors handles all aspects of your financial future, including growing, protecting, and preserving your family's and business's wealth. Delta Wealth Advisors offers accounting and tax services, financial planning, and private real estate investments via remote and in-person meetings all with the priority of being prompt in their responses.

What Is a Good Net Worth By Age?

Understanding net worth by age is important to see if you are doing well financially when compared to others your age. According to the U.S. Federal Reserve Survey of Consumer Finances (SCF), the average net worth by age is broken down into six age categories: less than 35, 35-44, 45-54, 55-64, 65-74, 75 or older. The mean average of each of these categories is:

  1. 65–74: $1,215,920
  2. 55–64: $1,176,520
  3. 75 or older: $958,450
  4. 45–54: $833,790
  5. 35–44: $437,770
  6. Less than 35: $76,340

Depending on your age, you could have a significantly different net worth as compared to others in the same category. In that case, a good net worth would be anything more than the average amount listed above. However, HNWI, very-HNWI, and ultra-HNWI would have a much higher net worth than the mean average individual.

If you do not have $1 million in liquid assets, you might consider yourself a high earner, not rich yet (HENRY). A HENRY means you have a lot of income, but have yet to reach the minimum qualifications for a high net worth individual. In this case, a wealth management advisor can help you with your financial investments to reach your goals.

Do You Count 401K Into Net Worth?

Yes, all 401(k) or other retirement accounts are factored into your net worth. According to a 2019 U.S. Census Bureau report, retirement funds, including 401(k)s, are the second-largest contribution to household net worth. Other items that factor into your net worth include real estate, checking and savings accounts, and cars.

Plan for Your Financial Future

Delta Wealth Advisors helps you determine the best high net worth investment opportunities for your portfolio. We've grown our company by working with hardworking business owners and executives that recognize the value of solid financial planning. We build partnerships with our clients to help you reach your short and long-term financial goals. Our clients hire us because they lack the time or ability to handle their financial planning, investments, and taxes. Visit our website to learn more about Delta Wealth Advisors and how we can help you.