High Net Worth Individuals, commonly known as HNIs are a unique class of investors who have a significant amount of wealth at their disposal and are willing to invest in various financial instruments to grow their wealth further. HNIs are an important segment of the investment market, and they have their own set of benefits and characteristics that set them apart from the average retail investor. Let’s talk about them!
HNIs are considered as that sector of high net worth individuals who owns separately managed investment accounts for banking or IPO extremely personalized for them. HNIs are individuals in India who have a net worth of more than Rs. 5 crores or an annual income of more than Rs. 50 lakhs. They are also referred to as ultra-high net worth individuals (UHNIs) if their net worth exceeds Rs. 25 crores. HNIs are usually businessmen, entrepreneurs, senior executives, or successful professionals who have accumulated significant wealth over the years. However, there is no consensus on how affluent someone must be to fall into this category; high net worth is commonly stated in terms of holding a particular quantity of liquid assets.
HNIs are those with a net worth of more than Rs. 5 crores or an annual income of more than Rs. 50 lakhs. If their net worth reaches Rs. 25 crores, they are referred to as ultra-high net worth individuals (UHNIs). HNIs are typically businessmen, entrepreneurs, senior executives, or accomplished professionals who have amassed substantial money over the course of their careers.
HNIs have access to a wider range of investment options than retail investors.
- They can invest in a number of instruments, such as stocks, mutual funds, real estate, and alternative investments like as hedge funds and private equity. HNIs also have access to exclusive investment options that normal investors do not have, such as pre-IPO investments and structured products.
- HNI investor receives personalized service that they receive from their financial advisors which is another important benefit.
- HNIs usually have a dedicated relationship manager who provides them with customized investment advice and portfolio management services. This level of personalization ensures that HNIs’ investments are aligned with their financial goals and risk appetite.
Who is a HNI in India?
HNIs or high net-worth individuals (HNIs) are persons with an investible excess of more than Rs 5 crore who work in the financial services sector. HNIs are classified as those whose investible assets exceed a particular amount.
Private wealth managers value them for their liquid assets, which earn a percentage of the total assets they manage. According to The Wealth Report 2022, the number of ultra-high-net-worth-individuals (UHNWIs) globally increased by 9.3 per cent.
Difference between HNI and Retail Investor:
Now let’s talk about the key differences between HNI and retail investors.
- The primary difference is the amount of money they have available to invest. HNIs have a lot more money at their disposal than retail investors, which gives them greater flexibility and access to a wider range of investment options. Retail investors, on the other hand, have limited funds to invest and are generally more risk-averse.
- SEBI has treated HNIs as high application value who have minimum investment of 200,000 in IPO shares than that of retail investors.
- Another key difference is the level of knowledge and expertise that HNIs possess. HNIs are typically more financially savvy and have a better understanding of the investment landscape than the average retail investor. They are also more likely to have a team of financial advisors and experts to help them make investment decisions.
In conclusion, HNIs are a unique class of investors who have significant wealth at their disposal and have access to a wider range of investment options than retail investors. They also receive personalized investment advice and have a higher level of financial knowledge and expertise. If you are an HNI or aspire to become one, it is essential to have a clear investment strategy and work with a team of trusted financial advisors to achieve your financial goals.