The population of wealthy individuals has fluctuated over the past few years, with the global Ultra-High-Net-Worth population sitting at just over 390,000 individuals. While in 2021 Wealth X predicted a 10% rise in UHNWs for 2022, the total figures for this cohort gradually declined due to the Ukraine war and linked trading conditions.
That said, the number of ultra-rich is projected to rebound, increasing by a staggering 28% by 2026, according to the 2022 Wealth X report.
The world’s richest demographic is constantly shifting and evolving, evoking a change in UHNWI interests, behaviours, purchasing habits, values, and lifestyles.
According to a 2022 Knight Frank report, it is estimated that 129,557 UHNWIs (individuals defined as having net assets of US$30 million or more) are self-made and under the age of 40, around a fifth of the total UHNW population.
The new generation of UHNWIs is more global and tech-savvy than previous cohorts with more varied interests. These young, wealthy individuals are also aware of environmental and social issues and their implications, becoming a force of good as they are more likely to consider ESG concerns when investing.
Given their significant wealth, UHNWIs require bespoke, personalised services that meet their particular needs.
Below, Relevance highlights the current and evolving priorities and interests of UHNWIs and how service providers can best match their offerings to the lifestyles of this new wealthy generation.
What do UHNWIs care about?
1 – Enjoyment and Connection
While materialism was once the pinnacle of wealth, today’s younger UHWNIs seek authentic and memorable experiences with their peers and loved ones. They are looking to be their casual, informal, genuine selves above consuming materialistic goods. This interest of UHNWIs has become exceptionally important following global lockdowns, which forced many families and friends apart. The pandemic inspired many to travel to new destinations and discover new enclaves from trusted sources.
From private access to exclusive destinations, carefully curated special events and limited-access experiences, service providers that cater to the lifestyles and interests of UHNWIs are focusing on unique, bespoke experiences that emphasise enjoyment, exclusivity and emotion.
When money is no object, only highly unique and personal experiences will help foster and maintain relationships with other equally successful peers.
One very successful way to utilise this UHNWI interest is to adopt luxury as a membership. This is the opportunity to enjoy positive experience-based services that are exclusive and limited to their accessibility. This could include VIP access to a private members club, the ability to attend exclusive events or access to limited-edition luxury products.
One brand proving to be exceptionally successful at targeting the interests of UHNWIs is Hermès. The French leather goods designer produces a limited quantity of its iconic Birkin each year. These are released every few years, and incredibly hard to buy, even for the most connected UHNWIs, making them highly sought-after. Created from start to finish by one craftsman, these handbags come in various materials and colours, and demand has never been greater. In November 2020, a Birkin auction record was set for a Matte White Himalaya Niloticus Crocodile Birkin 25, which sold for $388,000 at Christie’s in Hong Kong.
2 – Privacy and Security
As we emerge from COVID-19, UHNWIs have strongly emphasised their need for privacy and security, requiring larger, more private indoor spaces as they spend more time at home.
Living spaces must be optimised for several adults and children to reside comfortably, with enough private space to play and work from home. The super rich also requires digitally connected, sustainable homes updated with the smartest appliances, state-of-the-art electronics, and entertainment equipment.
Outside their homes, UHNWIs embrace the gated community and private club model, including country, yacht, and golf clubs filled with familiar faces and well-equipped with the most sought-after services, amenities, and activities.
While the new generation of UHNWIs deeply resent surveillance capitalism, tracking, and selling of their data, protected environments such as villas, farms, ranches, islands, jets, and yachts have become the most favoured spaces post-pandemic for the latest cohort of UHNWIs.
The new generation recognise that too much privacy and security can be isolating; thus, striking a fine balance is essential for them and their trusted advisors.
3 – Philanthropy and Giving Back
Philanthropy is a growing interest of UHNWIs, with more than half known to be actively involved in philanthropic giving, be it through their own charitable organisations or other means. As individuals become wealthier, they feel a greater obligation to engage with compassionate causes, notably as societal expectations of ‘giving back’ have risen admist financial inequality, global environmental issues and high-profile initiatives.
Equally, this shift can be attributed to the increasing proportion of UHNW women among the audience – who are generally seen as more philanthropic – as opposed to an increasing interest in philanthropy among the traditional male UHNW cohort.
According to Wealth-X 2022, education is the most popular theme for philanthropic giving, with almost eight in every 10 billionaires directing at least part of their philanthropic donations to this field, often by providing infrastructure, research endowments and scholarships. In addition, social services, healthcare and medical research, as well as arts and culture are also popular interests of UHNWIs.
More than 10% of UHNWIs have also given or pledged money to Covid-19-related activities, according to the Wealth-X Database. Others have made non-monetary contributions, such as providing supplies of personal protective equipment. These individuals have been looked upon to step up during this crisis and contribute to global efforts to tackle the pandemic.
4 – Social Compassion
UHNWIs, especially the younger generation, are increasingly focussing their wealth towards socially, ethically and environmentally conscious businesses, which could spur the growth of sustainable investments. The younger digitally native generations of UHNWs are strongly influencing family purpose, values, consumption, assets, and philanthropic projects toward changing the world to be a far better place, unlike any other generation. In fact, the increase in the levels of compassion is likely to be attributed to the growing numbers of females among the UHNW population.
The Bank of America predicted last year that Millennials could spend between $15 trillion and $20 trillion on ESG investments in the U.S. in the next 20 to 30 years. According to investment research firm Morningstar, worries about climate change, in particular, are a big reason for this growing UHNWI interest. The Covid pandemic, too, has also been a wake-up call for many.
With Millennials now responsible for the new wealth generation — and many more set to become recipients of the Great Wealth Transfer as baby boomers pass down their riches — that is set to pave the way for new sustainable investment options.
Additionally, to serve the interests of UHNWs successfully, advisers must be able to help them plan for multi-generational wealth. While many Ultra-High-Net-Worth clients may frivolously spend their wealth within their lifetime, some ultra-wealthy investors display a heightened focus on using their wealth to create a family legacy or to make a positive impact, often leaving their assets to their children or grandchildren. Their portfolios may typically include private equity, hedge funds, emerging markets investments and property.
5 – Health and Wellness
For the latest cohort of UHNWIs, exercise, nutrition, and wellness are now commodities. Of course, in a post-pandemic world, all have come into profound focus, and the ability to adopt a preventative rather than reactive approach to their health and wellness has become the gold standard of healthcare.
The world’s wealthiest individuals seek to enhance their health span, not just their life span. These individuals not only want to live longer, but they want to guarantee that their years on earth are spent in good health and can make the most of their life.
These highly informed and inquisitive individuals are interested in advanced surgery techniques, genetics, biomedicine, and other healthcare innovations. As a result, journeys of discovery to longevity innovation labs and clinics worldwide have since become far more common for the richest in society. The super rich not only wish to improve their own life but harbour as much passion for improving the health and wellness of others by investing in innovations that extend the quality and quantity of life for all.
This revolutionary interest of UHNWIs has been demonstrated significantly in the yachting industry, with many of the world’s most impressive superyachts boasting state-of-the-art wellness centres, trained personal trainers, nurses and nutritionists, meaning yacht owners and guests can keep up with their health and wellness regime at sea. Likewise, super-prime property developers are also finding ways to target the interests of UHNWIs, building luxury real estate well-equipped with the necessary amenities to enhance one’s wellbeing.
Contact Relevance’s specialists for advice on any of the UHNWI interests discussed and how to tailor your digital marketing strategy towards this new cohort of global, tech-savvy, and environmentally conscious UHNWIs.