Have you ever wondered which brokers are suitable for millionaires and high-net-worth individuals? Find out the answer in this article.
Brokerage firms are essential for every trader, but millionaires and high-net-worth personals must be particularly ive when it comes to choosing a broker. Having more money at stake, their experience is more likely to be different than regular traders. If you consider yourself to be a high-income earner or have at least $5 million of liquid assets at hand, it's time to start digging into wealth management and financial planning. This includes knowing which broker is worth your trust.
Qualities to Look For
Brokers come in different tiers, but most of them would treat wealthy customers with extra care by offering a bunch of special services to deepen their relationship and perhaps even expand their own business. You might get invitations to elite events, galas, and private auctions, or get access to exclusive benefits that won't be available anywhere else. But above all, the most important thing is to get your priorities right.
You must know what you need in a broker and how it can help you maximize your wealth. Remember that not all popular brokers are good for professional traders and millionaires. Thus, choosing to invest in a giant company simply for its size and popularity is not necessarily the best move for high-net-worth investors. The following are some other aspects that you should consider instead:
Level of Customization
Big investors typically have more needs and demands than regular traders. They need to be smart with their money, allocating it to different investments in order to reduce risks and find the best combination that works for them. This is why it's highly recommended to choose a broker with a high degree of customization.
So, instead of treating you like any other client, the best brokers would work closely with you and get to know you better in order to provide the best-personalized service for your satisfaction. They might even offer financial planning services or personal consultations to help you understand what wealth management really means and how you can profit the most.
Consider Account Types
Each brokerage firm comes up with a different series of account types to choose from. This may include a standard taxable account, a custodial account for your children, a retirement account, and so on. Generally speaking, the wider the options, the better it is. However, it all actually comes back to your needs as an investor.
Available Tools for Support
Another thing to look forward to is the tools you need for your trading activities. Beginner traders would need a lot of educational materials and supportive customer care. Meanwhile, advanced trading tools, expert analysis, and market research tools are much more interesting for professional traders. Therefore, think about where you stand as an investor and what type of investor you are. This will help you see which broker offers all the tools you need to improve your trading journey further.
Considering some aspects above, here are some recommendations of reliable brokers to get you started.
Fidelity Investments
Established in 1946, Fidelity Investments is a Boston-based company that has no less than $4.5 trillion in assets under its management, making it one of the leading companies in the industry. Over the years, Fidelity has been serving over 40 million customers worldwide and continues to provide financial services for almost any type of trader in the market. It offers various attractive trading conditions, including low trading costs, no minimum deposit requirement, and a wide variety of assets.
Furthermore, Fidelity provides reliable trading platforms suitable for both desktop and mobile users. For professional clients, the broker also has a number of wealth management services that provide access to one-on-one consultations with a team of experts, such as Fidelity's Personalized Planning & Advice, Fidelity Wealth Management, and Fidelity Private Wealth Management. Moreover, the broker offers multiple investment products suitable for big investors including mutual funds, excellent market research tools, crypto trading, retirement and IRAs, health and college saving accounts, etc.
Interactive Brokers
Interactive Brokers (IBKR) is another popular brokerage firm with excellent track records. The broker was established in 1978 and has grown into the largest online trading platform in the US at the moment. With decades of experience, the broker successfully gained more than one million customers from various regions.
There are loads of investment products that you can choose from, such as stocks, options, mutual funds, ETFs, futures, bonds, forex, and cryptocurrencies. With this broker, you can access over a hundred global markets and get some of the lowest spreads in the industry. For advanced traders, IBKR offers a special service called IBKR Pro, which provides a wide range of advanced tools, special pricing, and speedy execution.
www.interactivebrokers.com
1:100
$10000
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Interactive Brokers is a direct market access broker that provides execution, clearance, settlement, and prime brokerage for customers. Since it was found 41 years ago by Thomas Peterffy, the company has grown internally to become one of the premier securities firms with over $7 billion in equity capital.
First acknowledged as a popular broker for advanced traders, Interactive Brokers launched a second tier of service called IBKR Lite for more casual investors in 2019.
The IBKR Lite provides services on over 125 market destinations worldwide and gives direct access (online) trade execution and clearing services, both to institutional and professional traders for a wide variety of traded products including stocks, options, futures, forex, fixed income, and funds worldwide. Interactive Brokers Group and its affiliates execute over 859,000 trades per day.
Headquartered in Greenwich, Connecticut, Interactive Brokers has over 1,400 employees in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China, and Estonia companies. IBKR is regulated by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Financial Conduct Authority (FCA), and is registered in the New York Stoch Exchange (NYSE).
Interactive Brokers offers a wide range of product-centered tools like the OptionTrader and Probability Lab for simplified single and complex multi-leg option trading; FXTrader for forex trading, Mutual Fund/ETF Replicator for helping traders find a lower cost on ETF alternatives, also fixed-income screeners for corporate and agency bonds. Overall, trading with Interactive Brokers would be provided with the most useful and updated tools to maximize trading and investing goals.
As a popular and regulated broker in the US, Interactive Brokers has won some awards. Recently, they were awarded by the Barrons as the 2019 Best Online Broker, which is categorized as the best broker for mobile, international, and frequent traders. Besides, they also won an award as Top Performing Broker by the Preqin Service Providers, and Best Overall Broker by Investopedia (Best for Low Costs, Best for International Trading, Best for Options Trading, Best for Day Trading, and Best for Penny Stocks). The awards are not only achieved during 2019. Since 2005, Interactive Brokers has won lots of awards regarding its best services for clients.
To optimize clients' trading speed and efficiency, Interactive Brokers provides some powerful suites of trading platforms. Below is the list:
- Client Portal
A one-stop destination to check quotes and place trades, see account balances, Profit and Loss, as well as key performance metrics, funding, and reporting. - Desktop TWS
A flagship platform designed for active traders and investors who trade multiple products and require power and flexibility. Opening an account in Interactive Brokers and using this platform allows traders to utilize the most advanced algorithms and trading tools, as well as a library of tools and asset-based trading layouts for optimum customization. - IBKR TWS for Mobile
The IBKR TWS for Mobile is made for traders who want to easily trade and monitor their IBKR account on-the-go from either iOS or Android device (tablet or smartphone). - IBoT
IBoT is a robot for finding information and placing orders using clients' own words. IBot is available on TWS for Desktop, IBKR Mobile, and Client Portal. - IBKR WebTrader
IBKR WebTrader is made for traders and investors who prefer a simplified interface. - IBKR APIs or IBKR Pro
This trading platform is provided especially for traders and investors who want to write their trading software or automated trading programs; third-party software users.
Overall, Interactive Brokers has always been a great choice for those who want to find out a credible and regulated broker for trading. Offering lots of trading platforms, Interactive Brokers has committed to provide their best services for both novices and professionals, since it is suited to every clients' needs.
TD Ameritrade
TD Ameritrade is a well-known brokerage firm that was founded by Joe Ricketts back in 1975. It is worth mentioning that since 2020, this broker has been officially acquired by Charles Schwab, so all of TD Ameritrade's accounts as well as the broker's subsidiary trading platform, Thinkorswim, will be moved to Schwab starting this year. The full integration is expected to happen in September 2023.
At this point, there is no use in comparing TD Ameritrade and Charles Schwab as they are now a part of the same company. However, both companies are undoubtedly very popular among traders and investors from all around the world. TD Ameritrade in particular has over 11 million customers and more than $1 trillion of assets under its management. The company offers various investment products such as stocks, forex, mutual funds, ETFs, options, futures, cryptocurrencies, bonds, and many more. There is also a lending program where investors could borrow and lend the shares they own to earn additional income.
Tastyworks
Tastyworks is a trading platform that was developed by its parent company, Tastytrade. It is a tech-based platform that's mostly suitable for active options traders while offering services for other assets such as stocks, futures, commodities, ETFs, indices, and cryptocurrencies. The platform is accessible via desktop, browser, and mobile.
For options traders, Tastyworks probably has the best services in terms of pricing structure and technology. The broker only charges commissions when you open a position and the amount is fixed at a certain level per trade. Apart from that, the platform offers a lot of interesting features, such as the Follow Feed option that allows users to follow their favorite traders' activities and a huge library of educational content for all types of traders.
Comparison Table
If we compare each broker on the qualities to look for, here is the overview:
Broker Aspects | Fidelity Investments | Interactive Brokers | TD Ameritrade | Tastyworks |
Level of Customization | ✔️ | ✔️ | ✔️ | ✔️ |
Account Types |
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Tools for Support |
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The Bottom Line
Like any other trader, high-net-worth individuals also need to open a brokerage account to make investments. However, choosing a broker is not that simple if you are a big investor with millions of dollar worth of assets in your pocket. It's not wise to just randomly choose a broker based on obvious, typical things like popularity or client base size. Instead, look for brokers with great custom solutions and favorable features that could accommodate your demands and expectations.
At the end of the day, it all comes back to your personal preferences. You'll have to do your research and compare multiple options to find the one that suits you the most. Find brokers that genuinely care about their clients by continuously improving their services to support that cause. After all, you'll be entrusting them with your precious assets, so you need to make sure that you choose the right one for you.