Determining who is super-rich, private banking edition

Categorizing people into different income groups is an interesting exercise for social scientists but it may be necessary for certain occupations. Take private bankers as an example:

Call it economy-class rich. Business class? That’s $100 million. First class? $200 million. Private-jet rich? Try $1 billion…

The measure of what makes someone rich has changed dramatically in the past two decades. In 1994, when Peter Charrington, global head of Citi Private Bank, first joined the firm, “Three million was largely considered ultra-high net worth across the industry,” he recalled. “Fast-forward almost 25 years, and $25 million is how we define ultra-high net worth.”…

Placing investable assets of at least $25 million with a wealth manager—and clients with that amount or more tend to work with a few firms—can bring access to initial public offerings, and having at least $5 million in investments moves a client past one regulatory hurdle to taking part in private offerings…

It’s direct investment in companies and buildings where the line between the rich and seriously wealthy is most pronounced. “This is a threshold differentiator among the world’s wealthiest, compared to the merely very wealthy, let alone the 401(k) investor,” said J.P. Morgan Private Bank’s Duffy. “These very large families are investing in private companies, owning a percent of the company versus a share of a public entity.”

On one hand, $25 million is pushed as a rough cut-off line but, on the other hand, there are some fine gradations both above and below this level. Does the quest to differentiate oneself in terms of resources as well as to offer different levels of service to such people ever end? (Presumably it must stop with the wealthiest people in the world but then there may be a quest to keep pushing those number upward.)

Another piece of this that is worthwhile to consider is the true sign of wealth is to buy into capital or the “means and modes of production.” It is one thing to own objects or investments and it is another to own significant stakes in companies and buildings. For example, the growth machine model of urban development would involve these super-rich individuals who the clout and resources to influence and direct development.

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