By Lonnie White
High Net Worth Individuals
High net worth individuals also known as HNWI's are generally investors with at least $1M in liquidity or depository accounts. The standards for this classification deviates slightly depending upon which institution you ask, but ultimately it refers to very wealthy individuals.
Family Offices
A Family Office as described in the investment world is any private institution or firm investing capital on behalf of a principal whom they represent. Family Offices do not pool together investors' money for investments; they merely manage a single family, or in some cases, multiple families assets. The sole purpose of a Family Office is to grow their clients capital through a variety of investment strategies. Family Offices represent what has come to be described as UHNWI's (Ultra High Net Worth Individuals).
Institutional Investors
An Institutional Investor is an entity which invests in a multitude of markets on behalf of its shareholders. Institutional Investors are not individuals, they are legal entities. These entities are typically managed by educated, seasoned individuals with substantial investing experience in addition to an impressive resumé.
Retail Investors
Retail Investors, also known as individual investors, are investors who purchase and sell securities of all sorts such as ETF's or mutual funds. Retail Investors are non professional investors and the securities they purchase are obtained for their personal portfolio. Because Retail Investors are individuals, they typically invest much less than institutional investors; as a result, Retail Investors are sometimes charged higher commissions and fees in comparison to their counterparts. In addition, the SEC (U.S. Securities and Exchange Commission) is tasked with protecting Retail Investors to prevent manipulation and negligence which may arise out of inexperience.
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