What Bank Do Most Millionaires Use?

There is no single bank that serves the majority of millionaires. High-net-worth individuals navigate a complex financial landscape, often utilizing a diverse array of financial institutions and specialized services tailored to their sophisticated financial needs. This approach optimizes their wealth, rather than relying on a singular banking relationship.

Beyond Retail Banking

The financial needs of millionaires extend beyond traditional retail banks. While they may use retail banks for everyday transactions, their primary financial relationships typically reside elsewhere. Millionaires often possess diverse asset classes, engage in complex investment strategies, and may have multi-jurisdictional financial interests, making standard retail banking services insufficient. Their wealth frequently involves intricate structures like trusts and business entities, which require specialized expertise retail banks do not provide. This complexity necessitates bespoke financial solutions for wealth management and planning objectives.

Specialized Financial Institutions

High-net-worth individuals engage with specialized financial institutions. Private banks offer personalized attention, wealth management, and investment services to affluent clients, frequently providing a dedicated private banker as a central point of contact. Wealth management firms offer comprehensive financial planning, investment management, and coordination with tax and estate attorneys. They focus on long-term financial strategies and holistic wealth preservation. Family offices serve ultra-high-net-worth individuals and families, providing customized services including investment management, tax planning, philanthropic advising, and lifestyle management. Boutique investment firms specialize in specific investment strategies or asset classes, attracting millionaires seeking niche expertise or exclusive investment opportunities like private equity, hedge funds, or specialized real estate investments.

Core Services for High-Net-Worth Individuals

Specialized financial institutions offer a suite of services. Wealth management and investment advisory services provide portfolio management, strategic asset allocation, and personalized investment strategies aligned with financial goals and risk tolerances. Fees often range from 0.50% to 1.5% of assets under management (AUM) annually, potentially lower for larger portfolios. Estate planning and trust services facilitate wealth transfer and tax efficiency. Professionals structure trusts, draft wills, and navigate inheritance laws to ensure asset distribution and minimize estate taxes. The annual gift tax exclusion is $19,000 per recipient, with a lifetime gift tax exemption of $13.99 million per individual, doubling for married couples. Advanced lending solutions include tailored credit lines, jumbo mortgages, and securities-backed loans, allowing borrowing against investment portfolios. Interest rates for these loans are variable, often a few percentage points above the Secured Overnight Financing Rate (SOFR). Tax planning strategies minimize tax liabilities. This includes leveraging deductions like the Qualified Business Income (QBI) deduction, allowing up to 20% deduction of qualified business income, and tax-loss harvesting, which offsets capital gains and reduces taxable income by up to $3,000 annually. Concierge banking and lifestyle services offer personalized support, including exclusive event access, travel, or unique financial transactions.

Key Considerations in Bank Selection

When millionaires choose a financial institution, several factors guide their choice. Personalized service and a dedicated, experienced advisor are paramount, ensuring complex financial needs are understood. The institution’s expertise and specialization in areas relevant to their wealth, such as international investments or specific tax structures, are highly valued, including a proven track record and deep knowledge. Security and reputation play a significant role; individuals seek trustworthy, stable institutions with robust regulatory compliance. While the Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor per ownership category per bank, millionaires require strategies for funds exceeding these limits, such as multiple accounts or specialized cash management solutions. For those with global assets or business interests, the institution’s global capabilities, including international banking and currency exchange services are vital. Transparent fee structures and a clear understanding of associated costs are important considerations. Finally, access to robust technology and digital platforms allows convenient account management and real-time financial oversight.