I currently use Scottrade to buy and sell stocks, however they have several limitations for depositing and withdrawing funds, i don’t come anywhere near the limits, but my thought would be some larger investors do.
What about people with $5M in stocks? What do they use to buy and sell?
$10M? 100M? $1+Billion?
They have people who do it for them.
Besides having people, they probably have multiple accounts. One of my clients inherited stock from a trust fund and it’s sitting in three different banks/accounts, each of which has its own investment manager. No idea why, and I doubt they know either. Another of my wealthier clients opens accounts the way some people buy shoes.
I would also be surprised if a place like ScottTrade didn’t have a way to remove restrictions or an alternate procedure (say, by phone) for unusual transfers. If you really wanted to moved $5 million over, I doubt they’d say no.
There are several obvious reasons for spreading the wealth:
Spread the risk - this way one rogue trader doesn’t turn all your assets to liabilities, or embezzle them all and head for the South Pacific, or any one of a dozen Bear-Sterns/Madoff type scenarios.
When you are trading massive amounts of stocks, some trading houses and management groups probably have preferred access to to stock from different IPOs depending on who is handling them. They can get you a share of the Facebook IPO, for example (to make a link with to the reason above)
I assume people who have multi-millions of dollars, the various financial institutions - banks, trading houses, etc. - the managers get to know who is who - and a lot of the transfers happen on verbal cues, followed by the formal transfer documentation. The first time someone got burned by a Madoff-type mess, the formal documentation requirements for large sum transfers would be explicitly mapped out. If someone’s assets started declining to the extent that the traders might question if the fellow was “good for it” for any cash transfer, I’m sure the word would spread fairly fast.
It’s not like you can have millions of dollars, do millions of dollars of business with people who manage your funds, and not be very well known to the staff there.
To avoid money-laundering and other criminal and securities violations, I’m sure there are a lot of checks and details to be verified by anyone handling large sums on behalf of clients.
I know someone with - I believe - between $5 & $10 million in stocks (probably closer to the higher number) and I’m pretty sure he uses the same brokerages as anyone else.
OTOH, he once told me he has no more than 3% or so invested in any one particular stock at any time.
If you have $100M or more, then you would likely have too much in any one stock to sell through normal means without moving the market too much. There are special means of buying/selling large blocks of stock.
This is essentially it, although I’d imagine it depends on the level of hands-on manipulation that the individual rich-guy investor wants to engage in.
There are probably the people who meet quarterly with their financial managers and give broad direction, and let the managers manage the mix of investments (stocks, bonds, mutual funds, gold, etc…) and the buying and selling thereof, and then there are probably the people who either do it themselves through a broker or who do it a level up through a financial manager, but with tight control over exactly what financial instruments are actually bought, and in what quantity.
And, like others have said, it’s unlikely that some one person is trading millions of dollars at a single trade; that’s more in the realm of the various states’ university endowments and retirement systems, such as Calpers.
Once every few months I’ll see a “Ask the trust fund baby anything” thread on 4chan. For proof they usually post screenshots of online bank and brokerage accounts, with amounts between $100k and a few mil, and they’re all branded the same as anything else - e.g. there are Bank of America, Scottrade, Ameritrade, etc. logos on them. So I’ll pile on to the consensus that most rich investors let their advisors handle it, but it’s possible and not too unusual to just have a few accounts with $100,000s lying around in them.