MSG Team's other articles

9463 Is Globalization a Zero Sum Game or a Win-Win Situation?

When we discuss globalization, we often take into account the fact that both countries that are partners in trade benefit from the exchange. What this means is that a country A that specializes in a particular good or service can trade with country B that specializes in another good or service. In this way, both […]

9777 Identification of Suitable Platform & Environment for ERP Implementation

Any ERP implementation attracts expenditure on account of Operating System (OS) and Relational Database Management (RDBMS) for hosting the system. Networking issues also assumes importance particularly when the system is rolled out at different locations. Additionally, licensing options associated with ERP packages need to be carefully evaluated during final contract negotiation. Operating System and Database […]

9634 How Information Technology can Enable Governance in Developing Countries

The Problems of Governance in Developing Countries Governance is a problem in many Third World countries where the structures and the systems of governance are slow, archaic, and bureaucratic. Moreover, many developing countries do not have processes in place that would ensure reliable delivery of public services. For instance, take the example of the Asian […]

10639 Pharmacy Benefit Managers: The Root Cause of High Healthcare Prices

Healthcare prices in the United States are much higher than compared to the rest of the world. There are many factors which can be held responsible for this high price. However, one of the most important factors is the presence of unscrupulous middlemen. Pharmacy benefit managers (PBMs) are one such class of middlemen which act […]

8729 Human Resource Information System (HRIS): Meaning, Evolution and its Features

In the contemporary scenario of modernization and globalization, organizations heavily rely upon technological advancement and innovation in the field of Information Technology. Advancements in the field of IT has opened up newer avenues for the organizations and provided a competitive advantage by using innovative and customized solutions. It has become an integral part of the […]

Search with tags

  • No tags available.

Who are HNIs and Why They are Valuable to Businesses

We often hear the term HNIs or High Net-worth Individuals mentioned in a wide variety of contexts.

Whether it is bankers launching a new product aimed at these individuals, media outlets reporting on their private lives and covering the weddings and other events, or for that matter, activists’ railing against increasing inequality, the topic of HNIs is never far from our attention.

So, who exactly are HNIs and why they matter in both positive and negative ways. To start with, the definition of HNIs varies from country to country and from corporate to corporate.

While in the United States, HNIs are defined as those individuals having more than a Million Dollars in net worth, in India and elsewhere, a Crore of net worth is enough to classify them as HNIs.

In addition, Credit Card issuers have their own basis for classifying individuals as HNIs and relationship managers in all corporates have their own yardstick for designating HNIs.

Whatever be the basis for classification and categorization, it is undeniable that HNIs are valuable customers and this is the reason why corporates flock to them to woo them and to make them invest in their firm.

Why the HNIs are Never Away from the News

One need not look beyond what has been happening to the India’s richest person and most valuable HNI, Mukesh Ambani, in recent months.

Whether it is his children’s mega weddings or their star studded receptions or his forays into Telecom and other sectors, Ambani is never away from the spotlight.

Apart from the gossip and the voyeuristic thrills of reading about HNIs and their lives, what makes them valuable is the very real aspect of the humungous wealth and the potential for business that they bring to the table.

Imagine a relationship manager who instead of chasing many clients worth a Million apiece and instead, netting an HNI who is worth a Billion.

In one shot, he or she is then able to garner as much business as all the other clients provide and this means that he or she can both scale up and at the same time derive synergies from managing the wealth of one individual and the diversified portfolio.

Apart from that, the other benefit that corporates get is that having HNI clients act as a multiplier with other HNIs too investing and this magnifies the scale and helps them derive more gains.

Thus, whether for good or bad, HNIs have the power to Crowd Out less wealthier individuals and instead, lead to concentrated investments and wealth management.

Increasing Income Inequality is Not Good for Society

Having said that, this same concentration of wealth in the hands of a few individuals can have deleterious consequences for the rest of society.

Indeed, if a few individuals aggregate wealth that the entire bottom 50% own, it means that there is a serious problem with the way that society is sharing the benefits of economic growth.

In other words, the gains from the economic growth are simply going to the top leaving the bottom poorer and worse off than before.

This is the reason why many economists in recent years have been calling on governments to do more to reduce the stark inequality and to lessen the gap between the rich and the poor.

Moreover, the obsession with HNIs is leading to neglect of the serious and important aspects of pressing issues such as Infrastructure, Education, and Health for the public which are no longer deemed important since there is the private sector to take care of these issues.

Thus, it is indeed the case that while HNIs make for good Page 3 reading, there is also the added consequence of the impact they are having on the wider society.

Why the HNIs Matter and Why it is up to the Government to Make Society Better

On the other hand, HNIs matter because they contribute much needed taxes to the government’s kitty.

Indeed, if not anything, some amount of concentration of wealth is needed in any country since that is the nature of capitalism that thrives on encouraging people to aspire to become richer and reach the pinnacle.

Moreover, the criticism that HNIs dodge taxes can be addressed by the governments through plugging the loopholes in the taxation systems.

In addition, HNIs also contribute to charity and given the immense power of their Trusts and Foundations; there is a definite positive contribution to society.

Apart from this, HNIs also help a country’s profile to be beefed up in global terms and they can serve as Brand Ambassadors for various causes which given their name recall and recognition can magnify the profile and serve as a shining illustration of the country’s success.

Thus, while there are some downsides to concentration of wealth, there are some positives as well as it is up to the governmental and other stakeholders to multiply the positives and improve on the negatives.

Greed is Good

Last, typically students in Business Schools daydream about making it big and becoming HNIs themselves.

We hope that the arguments presented here would help those who are on their way to the corporate ladder to discern how they can make a contribution to society while enriching themselves.

After all, HNIs are as much part of the solution as they are of the problem and hence, it is up to collective choices that we make as a nation and as actors in a worldwide web of humanity to ensure that the positives outnumber the negatives.

To conclude, to borrow a line from a famous Hollywood movie, Greed is good and to which we add, as long as it benefits society as well.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles