What Defines a High Net Worth Individual and How Do HNWIs Manage Wealth Across the UK, US, and Europe?

Many high-net-worth individuals seek a holistic financial solution to manage their investments, minimize tax liabilities and protect and grow their wealth over time. Dedicated, tailored services exist to support their unique needs. Confidence among HNWI in the UK has halved, according to a new Salts Wealth Index Report. This is due to increased scrutiny by HMRC on their planning to mitigate tax liabilities.

What is a high net worth individual?

A high net worth individual is someone who has accumulated a significant amount of wealth. This is typically measured by their investible assets, which include cash, investments and property. The number of HNWI worldwide is estimated to be 23.4 million, according to Statista. HNWI often work with specialist investment services to manage their assets and ensure they continue growing. These services can include private banking, tax planning and access to exclusive investment opportunities. In the US, a high net worth individual is considered an accredited investor if they meet specific financial criteria. This allows them to invest in private, riskier investments that are not available to the public. In the UK, HM Revenue and Customs (HMRC) defines an individual as a high net worth individual if they have investible assets of over £1m. This excludes the value of their primary residence and some tangible assets such as artwork and jewelry. It also excludes proceeds from life assurance policies and pension funds.

HNWIs in the UK

Becoming an HNWI requires years of hard work and good fortune. But reaching this level of wealth demonstrates an impressive degree of financial success and opens the door to new opportunities. The UK continues to be a top relocation destination for HNWI, thanks to its established business network and vibrant high society. However, recent sweeping tax changes are driving record numbers of millionaires to relocate internationally. HNWI are concerned about the tax complexity of their global assets, and are seeking effective strategies to mitigate this risk. The right advice can help them manage their tax burden, avoid unnecessary liabilities and optimize their investment returns. Many HNWI are also actively engaged in philanthropy, with 33% having already set up charitable trusts or included philanthropic giving in their estate plans. A further 26% have donor-advised funds, reflecting a growing trend towards integrating philanthropy as a core element of wealth management. In this respect, working with a specialist philanthropy adviser can be a powerful way to maximize the impact of your giving.

HNWIs in the US

require tailored services to protect their assets, reduce tax liabilities and set themselves up for long-term growth. These services can include estate planning, wealth management and access to exclusive investing opportunities. The right investment strategy is shaped by an individual’s risk appetite, personal circumstances and goals. In the US, the number of HNWI is expected to increase over the next three years. They can be found across the country, from thriving tech hubs like Silicon Valley and New York City to state capitals with lower taxes. Generally, HNWI are defined as those with investible assets of $1 million or more, excluding the value of their primary residence. These assets can be cash, stocks or bonds and a variety of other investments. This does not include tangible assets such as art, antiques or vehicles. These may be hard to sell or difficult to liquidate. HNWI typically seek a holistic wealth management service to manage their portfolios, including their primary residence.

HNWIs in Europe

With its diversity of investment opportunities and commitment to high standards of living, Europe is a top destination for HNWI seeking a balance between financial prosperity and quality of life. EU countries boast world-class healthcare systems, stable economies, and favorable tax regimes that make them a global financial hub. The EU’s well-developed capital market offers a broad range of investment options, including stocks, bonds, real estate, and alternative assets. In addition, the region places a strong emphasis on environmental sustainability and is at the forefront of renewable energy adoption. HNWI can take advantage of exclusive services that optimize the total value of their wealth, from risk management and succession planning to investment consulting and tax efficiency strategies. These services can help them reduce their tax liabilities and create long-term growth strategies. HNWI can also benefit from reduced fees on premium banking services. Those with a net worth of at least $10 million can access these services through private banks.

Conclusion

High Net Worth Individuals require tailored and holistic financial solutions to manage complex portfolios, minimize tax liabilities, and protect their wealth over time. Whether in the UK, US, or Europe, HNWI rely on specialist investment services, tax planning, and wealth management strategies to navigate changing regulations and global opportunities. With increasing scrutiny from tax authorities and growing interest in philanthropy and long-term growth, professional financial advice plays a crucial role in ensuring sustainable