How do very high net worth accounts trade?

[arden123456]

Should someone with a $1-25mm account value who still wants to day trade continue as a retail investor at a brokerage firm such as etrade, schwab, IB etc? How about someone with a much larger account, $100-500mm? Would someone at that larger account value still use a retail brokerage and trade from a individual account?

Is there a ceiling dollar value when an account no longer should be handled as an individual account, but better as a trust of some sort? Or does the legal structure of the account bear no relation to the account value size?

 

[Daal]

A really big account could get access to exclusive brokers at JPM, MS, GS and there, if the person is sophisticated enough, have access to investments that are not avaliable to retail (certain stock markets, CDS, mortgages, etc)
But for 95%+ of people, they are probably just fine at the retail firms. Most people can do just fine with ETFs and products like that

 

[dealmaker]

Should someone with a $1-25mm account value who still wants to day trade continue as a retail investor at a brokerage firm such as etrade, schwab, IB etc? How about someone with a much larger account, $100-500mm? Would someone at that larger account value still use a retail brokerage and trade from a individual account?

Is there a ceiling dollar value when an account no longer should be handled as an individual account, but better as a trust of some sort? Or does the legal structure of the account bear no relation to the account value size?

High net worth accounts 8 figures & up trade economic cycles thus they do not need a retail online broker to keep trading costs down. In my opinion if you have 8 figures & up you should be part of a multi-family office and if you have $50M and up you should have your own single family office. High net worth accounts are normally in bulge bracket firms/ brokers because there you will have access to deals that you won't through an online broker eg private offerings, managed accounts etc..

 

[lawrence-lugar]

Day trading is for small-time average Joes...with relatively small accounts...once your account reaches over one million...you're basically on easy street now. --
you don't need to be an aggressive, hungry cowboy anymore ...so your question is kind of not applicable.

 

[Turveyd]

If you have that kinda money, learn to live within it's means so new Ferrari every 2years, but certainly don't put it at risk trading or yourself through the stress, your rich, sit back enjoy it, richer won't make you happier.

 

[smallStops]

I wonder why some people divide million+ capital across many brokers.

 

[recession2016]

Day trading is for small-time average Joes...with relatively small accounts...once your account reaches over one million...you're basically on easy street now. --
you don't need to be an aggressive, hungry cowboy anymore ...so your question is kind of not applicable.

i know of a guy that day traded a 30 mil account plus margin with a retail broker, they closed his account because that was "too risky" for them

 

[Turveyd]

i know of a guy that day traded a 30 mil account plus margin with a retail broker, they closed his account because that was "too risky" for them

Don't blame them, imagine wrong side of a black swan all in thrn he owes them 20mil.

Ahhhh to be that rich, 5 digits without decimals would make me a lot happier, low 4s suck.

 

[globalarbtrader]

High net worth accounts 8 figures & up trade economic cycles thus they do not need a retail online broker to keep trading costs down. In my opinion if you have 8 figures & up you should be part of a multi-family office and if you have $50M and up you should have your own single family office. High net worth accounts are normally in bulge bracket firms/ brokers because there you will have access to deals that you won't through an online broker eg private offerings, managed accounts etc..

I think your number is a little off. Even a small family office will cost $500K a year to run. So at $50M you are handing over 1% of your capital every year just to run it. And you are still going to be handing over money for other advisory services you don't have in house. At this level having a family office is just an ego trip. I'd say multiple hundreds of millions it makes more sense.

Multi family office, yes sure about $10 million upwards to be allowed in the door is reasonable.

Below that you're looking at 'normal' private banks.

However not everyone wants to use this approach. Personally if I had that kind of money (and I haven't yet checked to see if I won the £130 million lottery jackpot last night) I'd just use lawyers for the tricky bits (trusts etc) and continue to manage everything myself, spread across multiple banks, countries, and brokers for safety.

GAT

 

[Mtrader]

However not everyone wants to use this approach. Personally if I had that kind of money (and I haven't yet checked to see if I won the £130 million lottery jackpot last night) I'd just use lawyers for the tricky bits (trusts etc) and continue to manage everything myself, spread across multiple banks, countries, and brokers for safety.

The best answer for a problem that 99,99% of people overhere will never have.

Long time ago I realized already that it is better not to break your head on solving hypothetical problems as we have already enough real problems to solve in the trading world.
But for Baron: the more threads and postings the better. $$$-wise.