The money transfers firm argues that the amount required to be classed as "wealthy" has gone up – this seems an obvious point as inflation erodes money. Today, a number of organisations still say that "high net worth" means holding at least $1 million in investable assets. Time, perhaps, for an adjustment.

Earlier this year, as surging inflation eroded the purchasing power of clients’ money, the understanding of what “high net worth” means was put to the test. The old idea that the term involves someone with at least $1 million of investable wealth seems dated. A million dollars isn’t what it used to be.

And it looks as though this news service’s speculations on the matter have been vindicated. According to a recent MoneyTransfers data presentation, the average net worth for a wealthy US person is $2.2 million.

That's a 16 per cent increase from the $1.9 million it would have taken to attain a similar status in 2021, the firm said. And it’s fair to assume that, given that inflation is a global issue, the same trend applies around the world. 

To put these figures in perspective, median net worth per household in the US is $121,700, the MoneyTransfers report said. This also highlights the level of income inequality in the US – an issue that the wealth industry cannot ignore.

"The cost of living is increasing at a faster rate than wages are growing. This year has seen inflation rates spiral to the highest they've been since 1981 impacting savings and investments. Consequently, it's becoming harder and harder for those in the lower classes to move up the financial ladder,” MoneyTransfers' chief executive Jonathan Merry said.

As this news service said in May, banks and other wealth managers typically have a minimum cut-off point for segmenting clients to give a rough idea as to whether serving them is profitable. With regulatory costs and other demands rising, white-glove service doesn’t come cheap. In today’s world, a million dollars or equivalent of assets, minus a primary residence, might secure a person a seat at the table for some non-traditional assets, but by and large banks and advisors won’t be able to put such a client in many exotic areas.

The subsequent weeks have done little to suggest that inflationary pressures are abating fast, although we have seen a number of interest rate rises from central banks. A fall in equities since the start of 2022 is also likely to show that the wealth of HNW individuals, as measured by groups such as Capgemini, Boston Consulting Group and Credit Suisse, has fallen. 

In any event, the meaning of “high net worth” may have to change with the times, and it appears new data confirms that point.