How to Choose a Financial Advisor for Millionaires (2026)

Most advisors say they work with millionaires. Few actually specialize. Here's how to tell the difference — and the exact questions to ask before you sign an advisory agreement on your $1M–$5M portfolio.

At $1M–$5M in investable assets, you occupy what the industry calls the "mass-affluent gap." Retail robo-advisors under-serve the tax complexity at your level. Traditional wirehouse advisors charge 1.0–1.3% AUM for model portfolios that don't justify the fee. True HNW boutiques often require $5M+ to open a relationship. The right fit is a fee-only RIA who specializes in this tier — but identifying one requires asking the right questions.

Fee structures at $1M–$5M

Three fee structures dominate this segment:

• AUM percentage: Typically 0.5–0.9% at this tier. On $2M, that's $10,000–$18,000/year. Fee-only RIA specialists tend to run 0.5–0.75%; wirehouse advisors charge 1.0–1.3%. The rate should decline at higher asset levels — ask for the breakpoints.
• Flat annual retainer: $10,000–$30,000/year regardless of assets. Economical at $3M+ where 0.7% AUM would cost $21,000+; expensive at exactly $1M compared to a 0.7% AUM fee of $7,000.
• Hourly / project fee: $250–$500/hour or $3,000–$7,500 for a one-time financial plan. Useful for getting advice before committing to a relationship, but uncommon for ongoing wealth management.

At $1M with a straightforward situation, Vanguard Personal Advisor Services at 0.30% AUM¹ may still be adequate. A fee-only RIA at 0.7% becomes worth it when they add direct indexing tax alpha that exceeds the fee differential, active Roth conversion modeling, or estate coordination your situation requires.

Credentials that matter

A CFP is the minimum. "Wealth manager" and "financial consultant" are marketing titles, not regulated designations — verify that any title maps to an underlying credential. A CPWA specifically signals depth in HNW client complexity; seeing it at a $1M-minimum RIA is a positive signal.

Minimum AUM thresholds

What an RIA's stated minimum tells you about their practice focus:

• No minimum or under $250K: They serve everyone. Not necessarily bad, but no specialization signal. Their $5M client likely gets different attention than you.
• $250K–$750K: Common for solid independent advisors. Comfortable for $1M clients.
• $750K–$2M: Practice deliberately aimed at the $1M–$5M tier. Likely has infrastructure (direct indexing platform access, estate attorney relationships) built for that client base.
• $2M+: Boutique; you're just meeting their minimum, which may affect service depth at the lower end of their range.

Ask what percentage of their current clients have assets in your range. An advisor with a $1M minimum whose median client has $4M is a better fit than one with a $250K minimum whose median client has $600K.

Direct indexing: can they actually deliver it?

Direct indexing holds individual securities replicating an index to enable single-name tax-loss harvesting — capturing the tax alpha that ETF-level TLH misses. Expected benefit: 0.5–1.5%/year on the taxable allocation depending on market volatility.⁴ On $1M in taxable, that's $5,000–$15,000/year in tax deferral — often more than the fee differential between a 0.3% and 0.75% advisor.

Not all RIAs have real access or experience. Questions to probe:

• Which platform do you use? (Parametric, Canvas by Schwab, Aperio/BlackRock, Vanguard Personalized Indexing, Fidelity Managed Accounts — a named platform signals real capability)
• What's the minimum taxable account balance to qualify? Most platforms require $100K–$250K in the specific account.
• How many client accounts do you currently manage with direct indexing? Vague or zero answers signal no meaningful experience.
• How often did you harvest losses in a client's direct-indexed account last year? High-dispersion years like 2022 yield strong harvests; low-dispersion years like 2024 yield less — the advisor should understand this dynamic and still have an active process.

An advisor who says "yes, we offer direct indexing" but can't name the platform is not delivering it in practice. See our direct indexing guide for the full math on when it justifies the fee difference.

Tax planning depth: what to assess

Tax integration is where most advisor value is created at this wealth tier — and where most advisors underdeliver. Four areas to assess:

• Roth conversion modeling. Do they run annual projections from now through your RMD age, showing the cumulative tax cost of different conversion speeds? Do they flag IRMAA thresholds if conversion income could trigger Medicare surcharges two years out? A good answer describes software-backed annual planning. See our Roth conversion guide for the mechanics.
• Asset location across all accounts. Do they manage your household holistically — taxable, traditional IRA, Roth, HSA — or only the accounts they custody? An advisor managing only your rollover IRA while you hold bonds in a taxable account is leaving 0.3–0.5%/year on the table. See our asset location guide.
• IRMAA awareness. At $1M–$5M, Medicare surcharges become a real cost of large Roth conversions, RMDs, or capital gain events. Does the advisor proactively flag when a planned transaction could push you into a higher IRMAA tier — two years before the surcharge hits? See our IRMAA planning guide.
• CPA coordination. Do they send a year-end tax projection memo to your CPA before December 31 showing planned transactions and recommended moves? Or do you hand your year-end statements to a CPA who has no context for what they mean?

10 questions to ask in the interview

1. What percentage of your clients have investable assets in the $1M–$5M range? Their core client type should match yours. An advisor whose median client has $10M will optimize their practice for different issues than yours.
2. Do you offer direct indexing? Which platform, and what's the minimum taxable account? Follow up: how many accounts do they currently manage in it, and what was their average annual harvest rate last year?
3. Walk me through your Roth conversion approach for a client in my situation. A strong answer references bracket management, your RMD timeline, and IRMAA awareness — not just "it depends on your situation."
4. Are you a fiduciary 100% of the time, including any insurance or annuity recommendation? Must be an unqualified yes. "Fee-based" advisors who earn product commissions are not 100% fiduciary, regardless of what they claim.
5. What custodian do you use? Should be Schwab, Fidelity, or Pershing — major, regulated, SIPC-protected. Proprietary custodians are a significant red flag.
6. How do you coordinate with my CPA? Look for a documented process, not just "we send them documents." Ask if they issue a year-end tax planning memo before December 31.
7. What's my total annual cost at my asset level, all-in? Get: your AUM percentage, any platform or custodial fees, and the expense ratios of funds you'd hold. Request this in writing before signing.
8. How many clients do you personally serve, and what's your team structure? A solo advisor with 200 clients delivers different service than a 3-person team with 75 — ask who handles your account when they're traveling or on leave.
9. How would you handle [your specific situation: concentrated RSUs, business equity, large inheritance]? A general "we'd diversify gradually" answer reveals shallow experience. A specific answer referencing exchange funds, installment sales, or 409A rules reveals real depth in your specific issue.
10. Can you provide two or three references from clients with situations similar to mine? Strong advisors have clients willing to speak. Any hesitation is worth noting.

Red flags

• Won't state their fee in writing before the first meeting. Legitimate advisors quote fees clearly. Evasiveness about compensation is the single largest red flag in the industry.
• "Fee-based." Industry jargon for "earns fees AND commissions." A fee-only advisor earns only client fees — no third-party compensation of any kind. Ask directly: "Do you receive any commissions, referral fees, or revenue sharing from any third party?" The answer must be an unqualified no.
• Variable annuities in the portfolio. Rarely appropriate for $1M–$5M investors and generate large commissions for the advisor. An unprompted recommendation to move assets into an annuity is a disqualifying signal.
• Proprietary funds or products. Wirehouses often recommend their firm's own funds because they generate internal revenue sharing. A fee-only RIA should use widely available, low-cost ETFs or institutional share-class funds with no revenue-sharing conflict.
• "I work with all types of clients." Generalists lack depth in the issues specific to $1M–$5M: direct indexing tax alpha, Roth conversion windows, concentrated stock strategies, IRMAA management. Ask who their median client is.
• Adverse IAPD disclosures. Search every advisor at adviserinfo.sec.gov⁵ before signing. Any regulatory actions, customer complaints, or criminal disclosures deserve scrutiny. A clean regulatory record should be table stakes.
• No estate attorney relationships. At $1M–$5M, you need at minimum a revocable living trust, beneficiary designation audit, and durable powers of attorney. If your advisor has never raised the topic or has no estate attorney referral network, they're not doing full-picture planning.

Decision framework by situation

Sources

1. Vanguard Personal Advisor Services — fee schedule. 0.30% AUM for accounts up to $5M. Verified May 2026 via vanguard.com.
2. CFP Board — Code of Ethics and Standards of Conduct. CFP® professionals are fiduciaries when providing financial planning services. Verified May 2026.
3. Investments & Wealth Institute — CPWA Credential. Chartered Private Wealth Advisor designation for experienced advisors serving high-net-worth clients. Verified May 2026.
4. Kitces — Direct Indexing Tax-Loss Harvesting Tax Alpha. Academic consensus: 0.5–1.5%/year annualized benefit, variance by market dispersion environment.
5. SEC Investment Adviser Public Disclosure (IAPD). Search any registered investment adviser or individual representative for disclosures, disciplinary history, and regulatory actions.

Content verified against SEC, CFP Board, Investments & Wealth Institute, Kitces, and Vanguard sources as of May 2026. Fee ranges reflect typical industry pricing and are not guarantees of specific advisor fees.