Understanding ultra-high-net-worth individuals

Parties on private islands. Rare whiskey collections. Concierge service to handle every business and household need. Whether these preconceived notions about ultra-wealthy individuals are accurate or not, it’s undeniable that wealth management firms’ interest in this group is rising rapidly.

And for good reason: The ultra-wealthy (those with $30M+ in investable assets) comprise 1% of the global millionaire population, yet they hold 32% of this group's total wealth.¹ This concentration of wealth means the ultra-high-net-worth (UHNW) cohort holds huge potential for wealth managers that can figure out how to profitably attract and serve them. 

So who are these individuals, and which factors can help us better understand their relationship with money? And when it comes to managing their financial needs (and more), what are they expecting from wealth management firms? Before digging into these questions, let’s identify who we’re focusing on.

What is an ultra-high-net-worth individual?

An ultra-high-net-worth individual is someone who has $30M or more in investable assets. But assets alone don’t define this group; factors such as an individual’s unique needs, expectations, and the origin of their wealth also play a crucial role.

Key characteristics of UHNW investors

What makes this group tick? Three areas offer clues: their demographic makeup, how they amassed their wealth, and what they prioritize when it comes to spending and investing their money.  

Demographics

How large is the UHNW population in the United States? In 2023, 147,950 individuals were considered ultra-high-net-worth—a 13% increase from 2022.¹ For context, the U.S. is by far the world’s largest wealth center, accounting for nearly 35% of the global UHNW class.¹

In the forthcoming Great Wealth Transfer, Cerulli estimates that nearly $124T will transfer intergenerationally to heirs ($105T) or to philanthropic causes ($18T) between 2024 and 2048.² The biggest eventual beneficiaries of this transfer? Millennials ($46T), followed by Gen X ($39T).²

Taking a closer look at the UHNW population, gender data points to compelling reasons to focus on ultra-wealthy women. At first glance, the numbers seem low. Though the proportion of UHNW investors who are women saw a gradual upward trend between 2018 and 2022, women comprised only 11% of all global UHNW investors as of 2022.³

But this comparatively low proportion masks the potential financial power UHNW women will wield in the coming years. According to Cerulli, of the wealth that will eventually be passed to next-generation households or charities, $54T will first be passed along to widowed spouses, 95% of whom are women.² Nearly $40T of these spousal transfers will be going to widowed women in the Baby Boomer and older generations.²  It’s important to note that women in these cohorts lived through a time when it was illegal to open a bank account for themselves, making the impending wealth transfer a momentous shift in more ways than one for this population.

Understanding how wealth is set to flow between spouses and generations is key to anticipating what’s ahead for UHNW individuals—and the help they may need navigating the opportunities and challenges these shifts present.

Origins of wealth

One of the most important ways to understand UHNW investors on a deeper level is to look at the sources of their wealth. In other words, how did they become ultra-wealthy? Did it happen gradually, suddenly, or somewhere in between? Knowing someone’s wealth story can help you get a sense of their relationship with money, their motivations behind how they want to handle their wealth, and much more.

• Inheritance: While each person is different, people who have inherited their wealth can share common traits. For example, inheritors tend to be able to engage in major philanthropic initiatives at an earlier stage, and they may feel a greater inclination to “give back” to society.⁴
• Earned income: High-earning executives typically accumulate wealth over a longer period of their working lives, compared with inheritors or entrepreneurs who may receive their wealth more suddenly. As a result, this UHNW group may favor luxury items like private jets, which can often serve a dual function for business and leisure.⁴

• Entrepreneurship: Individuals who have accumulated most of their personal wealth through founding and owning business ventures fall into this category. At $77.7M, their median wealth is the highest of these three groups, followed by $52.4M for inheritors and $40.9M for executives.⁴

Keep in mind two critical points about these categories. First, they aren’t mutually exclusive in practice. For example, someone who starts their own company may have done so with money they inherited.

Second, these categories can offer a view into how individuals might handle their wealth, but they don’t dictate a universal approach by any means. Spending decisions, lifestyle habits, and approaches to investing goals offer a more complete picture of these individuals.

Spending and investing preferences

Some common themes emerge when looking at how the ultra-wealthy spend and invest their money.

1. Tangible assets and luxury items: From art—which hit double-digit growth in 2023—to classic cars, limited-edition jewelry, rare coins, and more, this cohort embraces all things luxury.⁵ For this group, “joy of ownership” is among the top reasons they collect luxury items.⁵ Investment return expectations are intertwined with this joy: 57% scrutinize and track the return potential of passion-driven investments.⁶
2. Real estate: Despite rising mortgage rates, the global luxury real estate markets surged in 2023, according to Capgemini Research Institute.⁶ In fact, this growing appetite for luxury second (or multiple) homes has pushed real estate advice into the ultra-wealthy’s top five services they require from their wealth managers.⁶

3. Investment strategies: UHNW investors generally expect access to investment vehicles and capabilities that haven’t historically been available to the general public. These include alternative investments, along with custom separately managed accounts (SMAs).
4. Philanthropy: It’s clear that philanthropy is a priority for UHNW individuals. Globally, they gave a total of $190B to philanthropic causes in 2022, almost 25% more than in 2018.¹ Education, arts and culture, and health care and medical research are among the top philanthropic causes for UHNW donors in North America.⁷
   
   Gender and generational differences can help paint a fuller picture of their philanthropy. Ultra-wealthy women in general display a stronger propensity for generous philanthropic activity: The share of these UHNW “high-affinity donors”* who are women (22%) is twice as large as in the global ultra-wealthy population (11%).⁷ As for younger UHNW individuals, they differ in many respects from their older peers, which is driving major changes to donor engagement and giving practices.⁷ Members of younger generations are generally more global—having often lived, worked, or studied in more than one country—and are also highly mobile, digitally aware, and more activism-oriented.⁷

UHNW client expectations for wealth managers 

As for handling their financial lives, what do the ultra-wealthy expect from their wealth management providers? While every individual is different, this group has some common priorities.

First, ultra-wealthy clients expect their advisors to provide planning services to handle the complex needs and issues that are more common to this cohort. This support can include additional risk management and cybersecurity protections, succession planning, and a host of other services. UHNW clients also likely need help navigating intricate financial situations and managing portfolios with a higher diversity of assets in order to protect and grow their wealth. For example, a range of trading and execution capabilities are needed for common situations for the ultra-wealthy, such as concentrated stock positions for executives.

Next, family support is a top priority for this group—an area where advisors can play a key role in contributing to the well-being of the family. Along with addressing intergenerational wealth transfer needs, family support can extend beyond managing money to topics like family dynamics, next-generation education, and health and wellness. Lastly, the ultra-wealthy expect an exceptional client experience, tailored to their needs and preferences and incorporating services far beyond the financial world. A hallmark of this white-glove experience is the one-stop shop: UHNW investors often value a single, all-in view of their assets and accounts, with 24/7 access through digital channels.  

For more on what UHNW individuals expect from their wealth managers and how firms can attract and serve this group, visit the Fidelity UHNW Hub^SM and check out our white paper, “Ultra-wealth management: What it takes to break into the ultra-high-net-worth market and find success.”