You might have heard a term mention in publishing or from within your network: the High Net Worth Individual, or HNWI. Maybe you read it on a prospective financial advisor’s website, or saw it in the news. And you might be wondering: what is this club, why does it matter, and do I belong?

At first glance the definition of a High Net Worth Individual seems simple, but as with anything to do with money, dig a little deeper and it gets more complicated.

High Net Worth Individual Defined

While some firms and banks use different numbers to mark a High Net Worth Individual, the most common definition is someone with investable assets worth over $1 million in US dollars. And while net worth is typically defined to include your house, cars, investments, jewelry, and yacht (minus your debt), the High Net Worth Individual definition, only includes liquid, investable, financial assets — money you can move around easily within a few days.

So, do your checking, savings, and brokerage accounts add up to more than $1 million? If so, congratulations, you are a High Net Worth Individual individual.

The Difference Between Affluence and High Net Worth

The dividing line between an “affluent” individual and a High Net Worth Individual is important, because it typically marks the moment when you go from needing standard financial advice (How to Save for Retirement, Saving and Budgeting as Your Family Grows, Tax Advice for High Income Earners), to needing more personalized care from a qualified financial advisor or wealth manager.

As your investable assets grow, the tools and strategies you can use to protect and grow your money multiply and become more complicated—and so do the risks.  (In fact, there’s a whole section on The New York Times website dedicated to news concerning High Net Worth Individuals.)

A High Net Worth Individual can and should ask for estate planning, tax planning, hedge fund and private equity fund access, and more from their wealth management firm and/or advisors. Again note that we are talking about investable assets here—a wealth manager won’t be much use if your entire net worth is sunk into your home.

High Net Worth Individuals as a financial classification was invented in the mid-1990s with the first World Wealth report. At the time, is was an effective way of measuring world wealth and identifying the clients most in need of high-end financial services. But as the world’s elite have amassed more and more wealth (Bill Gates’ 1990’s wealth looks almost quaint now, doesn’t it?), the High Net Worth Individual has become a common, almost mundane designation, with over 13 million individuals in the world qualifying at the end of 2013.

Very High Net Worth vs. Ultra High Net Worth

Now, we also have the Very High Net Worth Individual ($5 million and up) and as of 2007, the Ultra-High Net Worth Individual ($30 million and up). The U.S. has the most High Net Worth Individuals (about 4 million) of any country, and London has the most (about 300,000) of any city. You can also find many High Net Worth Individual in Japan, Germany, and China.

If you’re looking for someone who specializes in High Net Worth financial planning, GuideVine offers you the ability to input your investable assets as a search criteria when searching for financial advisors experienced with your level of assets. Also look for designations such as Chartered Financial Consultant, Certified Financial Planner or Chartered Financial Analyst as another indicator of experience.

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Alden Wicker

Alden Wicker

Alden Wicker is a freelance journalist specializing in personal finance and sustainable lifestyle topics. She lives in New York, and is an expert at finding new and interesting ways of generating extra income. Her biggest budget weakness is eco-friendly fashion. Follow Alden on Twitter and Google+