Choose Your Level of Investments
Apr 08, 2022
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The amount of investment that a person is ready to make determines not only one's future profit. The level of services and the number of tools provided also depend on this factor. This practice allows financial institutions to allocate several levels of investment. Unlike many companies, Payday Depot treats all customers equally and provides top-notch services to everyone.
Categories of Investors
Financial institutions develop packages of services based on their categories of investors, determined on the basis of annual profit and investable assets of their customers. It is assumed that these groups have similar characteristics and, hence, similar requests. The amount of profit for each of the segments varies. For example, an investor that falls into category MA in the US may be a category UHNWI investor in a poorer developing country. In general, the following levels of investment are distinguished:
- Mass or Retail: all investors whose investable assets cannot exceed $500,000 will be included in this category.
- Mass Affluent: if you can invest more than 500 thousand dollars, your level will increase to Mass Affluent.
- High Net Worth Individuals (HNWI): a group with investable finance for more than one million dollars.
- Very High Net Worth Individuals (VHNWI): investors with over $5 million assets devoted to investment purposes.
- Ultra High Net Worth (UHNWI): to belong to this category, your investable assets must be at least $30 million.
There are a lot of segmentation grids, and different companies may prefer other classifications. Moreover, many financial institutions independently develop their own scales of segments. Therefore, if by contacting one bank, you get a lower package than the one you were counting on, feel free to contact another. And maybe, if it works with a different scale of categories, you will have more luck there.
Why Financial Institutions Need Classifications of Investor Groups
Over the long practice of dealing with different groups of clients, financial institutions noticed that investors with various property indicators have divergent characteristics in relation to:
- investment preferences
- principles on which they are guided when choosing the investment of their funds
- level of previous experience with investing in different projects
- risk inclination or risk avoidance
- long-term and short-term interests
Therefore, investment programs are drawn up taking into account these characteristics.
- If an investor from the UHNWI group is offered an investment program from the Mass Affluent category, it is unlikely to seem interesting to him. He will go to another financial institution to find a more original and socially significant project.
- At the same time, if an investor from the Mass Affluent category receives investment proposals designed for the HNWI group, he is unlikely to be prepared to take such high risks and will look for another financial institution.
On one hand, the classification of groups of investors makes it easier for financial institutions to work with them. But on the other hand, it creates barriers to entry to higher groups of elite clients. Therefore, when choosing a particular financial institution as an intermediary for your investments, make sure that its policy regarding investment programs is not discriminatory. And always ask for more!