What Brokerage Do Most Millionaires Use?

The financial landscape for affluent individuals often differs significantly from that of the average investor. Many people wonder how individuals with substantial wealth manage their money and what types of institutions they trust. For this discussion, a “millionaire” refers to an individual with $1 million or more in investable assets, excluding their primary residence. This article explores the types of brokerages and wealth management solutions that cater to high-net-worth individuals, highlighting their unique financial strategies and needs.

Common Brokerage Types Utilized by Millionaires

Millionaires typically engage with a range of financial institutions that offer specialized services tailored to their complex financial situations. Full-service brokerage firms provide a broad spectrum of services, including a dedicated financial advisor. These firms offer integrated wealth management, encompassing investment advice, research, and access to a wide array of financial products. Their fee structures can be commission-based or an asset-under-management (AUM) fee, typically ranging from 0.5% to 2% annually, often decreasing for larger portfolios.

Independent Registered Investment Advisors (RIAs) and wealth management firms operate under a fiduciary standard, legally obligating them to act in their clients’ best interests. These firms offer personalized financial planning. RIAs often use a fee-only or fee-based structure, where fee-only advisors are compensated solely by client fees, avoiding commissions from product sales. An AUM fee for RIAs can range from 0.5% to 1.5% for larger accounts.

Boutique investment firms provide highly specialized expertise in niche areas. This might include specific asset classes, such as private equity or venture capital, or unique tax strategies for particular professions. These smaller, focused firms cater to clients with specific financial needs not fully addressed by larger institutions. Their services are highly customized.

Family offices offer comprehensive wealth management for ultra-high-net-worth individuals. These entities provide services beyond traditional financial management, including tax, legal, and lifestyle management for multiple generations. Single-family offices generally require a minimum net worth of $100 million to $500 million. Multi-family offices can serve families with $25 million to $100 million in wealth by sharing resources.

Distinguishing Features of Millionaire-Focused Brokerages

Brokerages catering to millionaires offer comprehensive financial planning tailored to significant wealth. This includes detailed strategies for retirement planning, funding education, and philanthropic giving. Firms help clients navigate complex financial decisions, coordinating all aspects of their financial lives.

Advanced tax planning and optimization are central offerings, minimizing tax liabilities through sophisticated strategies. These include tax-loss harvesting, which involves selling investments at a loss to offset capital gains, and establishing charitable trusts to reduce current income or estate taxes. Firms also advise on federal estate taxes, with the 2025 exemption at $13.99 million per individual, rising to $15 million in 2026, which couples can often double.

Estate planning and wealth transfer services assist with creating wills, various trusts, and strategies to efficiently transfer wealth across generations. This planning minimizes probate complexities and potential estate taxes, ensuring assets are distributed according to client wishes. The annual gift tax exclusion, allowing individuals to gift up to $19,000 per beneficiary in 2025 without incurring gift tax, is a common planning tool.

Access to alternative investments differentiates these services, as these opportunities are typically unavailable to retail investors. Millionaires gain entry to private equity, hedge funds, venture capital, and direct real estate investments. These often require clients to meet “accredited investor” criteria: a net worth exceeding $1 million (excluding primary residence) or an income over $200,000 ($300,000 jointly) for the past two years. These investments can offer diversification and potentially higher returns but often come with higher liquidity risk and longer lock-up periods.

Lending and credit solutions provide flexible financing options. Securities-backed lines of credit (SBLOCs) allow clients to borrow against their investment portfolios at competitive variable interest rates, typically the Secured Overnight Financing Rate (SOFR) plus a spread ranging from 1.90% to 3.10%. These lines of credit can be used for various purposes, such as real estate purchases or business financing, without liquidating investments. Concierge and specialized services, such as personal banking, insurance solutions, and art advisory, demonstrate the holistic approach these firms take.

Key Considerations for Millionaires When Selecting a Brokerage

The relationship between an advisor and client is a primary consideration for millionaires selecting a brokerage. Establishing trust and clear communication is important, as clients seek confidence in their advisor’s expertise and integrity. Regular, transparent reporting and meetings help ensure financial strategies align with evolving goals.

Understanding the fee structure and transparency is important. Firms may charge AUM fees, commission-based fees, or retainer fees. Clients should comprehend all associated costs, including administrative fees and underlying fund expenses. Clients with substantial assets may negotiate lower percentages.

The firm’s reputation and security measures are important factors. Millionaires seek institutions with a strong track record, robust regulatory compliance, and advanced cybersecurity protocols to protect their assets and sensitive financial data. Due diligence on a firm’s history and security infrastructure provides peace of mind.

Specialization and expertise are valued, as millionaires often have unique financial circumstances requiring tailored advice. This includes specific knowledge relevant to business owners, executives with concentrated stock positions, or individuals managing inherited wealth. Finding a firm with advisors possessing deep understanding in these areas leads to more effective and personalized strategies.

Technology and digital capabilities play a role in the selection process. Access to intuitive online platforms, real-time performance reporting, and secure digital communication channels enhances the client experience and facilitates efficient wealth management. The ability to access information and interact with their financial team seamlessly is important.

Minimum asset requirements filter the clientele of specialized firms. Many high-end wealth management firms require clients to have investable assets starting from $2 million to $5 million, with some divisions or family offices requiring $100 million or more. These thresholds ensure firms provide the intensive, personalized service affluent clients expect.