What Matters Most: Inside the UHNWI Mindset
Everyone now knows what UHNWI stands for – but what do the UHNWIs themselves stand for? Winston Chesterfield, founder of strategic consulting firm Barton Consulting, reveals the characteristics of the world’s most exclusive groups of consumers – and how you can tailor your offering to their unique tastes.
What are the values and objectives of the world’s wealthiest people, otherwise known as Ultra High-Net-Worth Individuals (UHNWI)? How do they think, and what affects them the most? Are they the same or different to ordinary consumers?
The UHNWI is something of an enigma for luxury brands. Attractive due to their great wealth and potential spending power, they are nevertheless often difficult to understand or appreciate, as their existence isn’t relatable for most individuals.
Barton has conducted research that provides insight into who these UHNWIs are, what matters to them and how they are a unique consumer type in the luxury world.
UHNWIs are defined as individuals with more than $30m (£22m) in total net worth. The total global UHNWI population in 2021 stood at 295,450 (Wealth-X, 2021). Their total wealth is $35.46t (£22.13t) – about the same as the annual GDP of the US and China combined.
As a very small population, they are often treated homogenously, but there is massive diversity within them, particularly from a wealth perspective. There can be a world of difference in terms of lifestyle and attitudes between an individual worth $50m and one worth $5b. But their net worth tends not to define them or make them who they are.
So where do they get their values from?
Their background is one driving force. Cultural upbringing and religious beliefs, but also their demographic background and childhood, can shape the way they see things and the approach they take, well after they have amassed a great fortune – it is important to note that 72% of UHNWIs are entirely self-made, and only 20% have inherited their wealth (Wealth-X, 2021).
Despite belonging to one region, which is usually dictated by their cultural or business background, many UHNWIs are best described as ‘global citizens’ as they often own property in more than one region and frequently travel back and forth between their homes. This impacts upon their values significantly, as they have broader cultural experiences, making them cultural magpies and more tolerant of diversity. Their homes are places to welcome the world, as well as places to retreat to for privacy and personal cocooning.
The number-one shared interest among UHNWIs is philanthropy. And despite there being some fiscal advantages to considerable charitable giving, many UHNWIs see it as a duty to take part in this, a responsibility that comes with the fortune they have acquired.
What does this suggest about UHNWI values? For one thing, it demonstrates how their attitudes can be formed by hereditary concepts of the purpose of wealth, and the obligation to use it for good. It also shows how their sense of importance and social value can be formed, as the feeling of being thanked and honoured for generosity has an impact on their expectations.
However, despite an interest in philanthropy, UHNWIs are chiefly focused on their own lives, their family, and in particular their children – the kind of education they receive, the lives they build and succession plans for a business or the wealth they will leave behind. In our research, family and succession were mentioned by most as the greatest issue that concerns them. This means that UHNWIs are more susceptible to being sold something on the benefit to someone they care about, not themselves.
Which is not to say that UHNWIs are not concerned with their own health and wellbeing. It isn’t just living longer lives that they value but living lives which enable them to enjoy the passing of time more. Wasted time is an unforgivable tragedy to many very wealthy people and the need to make the most of their time dictates many of their decisions. Those who improve a wealthy individual’s knowledge on a topic are admired and given custom. The luxury products they value the most are appreciated for what they can do, how they work and the time they represent in terms of craftmanship and longevity.
UHNWIs are also concerned with more global issues. They are usually very well-informed individuals, intelligent and resourceful, and they want to know what is going on in the wider world in order to make better decisions. Their top concern overall in this context is political risk, followed by economic stability and then conservation, the environment and sustainability.
But what makes an UHNW individual UHNW in the first place?
The character of many UHNWIs – as most are self-made – is often different to others. Though many admit that luck has played a role in their success, many also refer to drive, vision and risk-taking. These are personal qualities they possess that play a role in them becoming wealthy in the first place. However, they are also qualities that shape the way they want to use their wealth.
UHNWIs are a complex population. Defined by others according to their wealth, they see themselves differently, and have values and objectives that surprise many. Their generosity can be formed by a cultural expectation or their upbringing, not their financial success. They can seek simplicity, but often only be offered ornamental intricacy. Their value system is often very personal and there to be explored and understood. At this level, with the great consequence of their achievement, the personal is more desirable. Understanding them by their values and motivations, rather than merely their wealth, will engender trust, warmth and – most importantly – loyalty.
CLICK HERE TO DOWNLOAD THE FULL REPORT
Continue reading Fox Quarterly…