When you first start investing, figuring out which brokerage to pick can be a challenge. Before you open an account, it’s worth looking at the biggest brokerage companies and identifying what makes these companies unique.
The following companies have more than $1 trillion in assets under management. With so much money at these brokerages, most seem to be doing something right.
Keep in mind that not all of these companies are discount brokerages. Some specialize in workplace retirement plans and others are full-service brokerages that charge high fees. These are the top 10 brokerages based on their assets under management.
BlackRock is the country’s largest brokerage firm with over $10 trillion in assets under management. BlackRock is famous for its iShares funds (also called SPDR funds) which are some of the lowest-cost ETFs available on the market. Robo Advisors rely heavily on BlackRock funds due to the quality of index tracking and the company’s low costs.
While you can buy iShares through most brokerage companies, BlackRock also allows you to open retirement accounts, brokerage accounts, and 529 accounts. It supports a range of investment options with commission-free trades and low costs on ETFs and mutual funds.
Fidelity famously became the first company to offer a no-fee index fund to accompany its already no-commission trading fees, and other services that investors love. With its myriad of low and no-cost products, Fidelity manages to offer a great website, offering services like a Robo-advisor and socially oriented investments. Thanks to its focus on low fees and customer service, Fidelity has more than $9.6 trillion in assets under management.
Vanguard was founded by John Bogle, who championed low-cost investing philosophies. Bogle was a pioneer of low-cost index funds, which is a portfolio of stocks or bonds, which gives you a more diverse way to invest than if you were buying individual stocks. Vanguard offers both actively managed and passive index funds. The company, which is headquartered in Valley Forge, Pennsylvania has over $8 trillion in assets under management.
4. Charles Schwab
With $7.32 trillion in assets under management, Charles Schwab is a consistent leader for “retail investors.” This is the group that may want access to low-cost funds, some trading capabilities, insights from leading investors, and great investing technology. The company offers automated investing through Intelligent Portfolios, socially responsible investment options, and all manner of retirement, education, and brokerage accounts.
5. JP Morgan Chase
A favorite amongst the personal finance community, Chase is known for its above average credit card rewards and lucrative checking sign-up bonuses. The company holds more than $2.8 trillion in assets under management for its clients. While most of J.P. Morgan Chase’s products are targeted to high net worth individuals, the company’s self-directed investment option offers commission-free trade, retirement accounts, and other perks for investors.
6. Edward Jones
With more than $1.7 trillion in assets under management, Edward Jones Investments is the first company on this list that doesn’t have a discount component. Investors who choose Edward Jones primarily work through the company’s financial advisors who guide investors toward the right mix of investments.
Compared to most companies listed here, Edward Jones has high fees, and the service you receive varies depending on the quality of your financial advisor. If you’re happy with your Edward Jones investment advisor, it may be worth keeping your investments at the company despite the high fees. However, investors who are less satisfied may want to consider a new financial advisor through Personal Capital or Wealthfront Advisory Services.
7. Morgan Stanley (E*TRADE)
Morgan Stanley was another company known for its high-fee, high-touch service, but the company made a bid at the discount market by acquiring E*TRADE in late 2020. E*TRADE is best known for its low and no-cost trading platform. It gives users the ability to open multiple accounts including education accounts, retirement accounts, and regular brokerage accounts.
The E*TRADE solo 401(k) account is consistently ranked as a favorite due to the ease of opening, funding, and transacting in the account. With the acquisition of E*TRADE, Morgan Stanley now has $1.6 trillion in assets under management.
8. T. Rowe Price
Founded in 1937, T. Rowe Price is a brokerage with more than $1.3 trillion in assets under management. While the company has pivoted multiple times since its founding, today, it is best known for its workplace retirement plans.
In general, the funds offered at T. Rowe Price tend to be a bit more expensive than those offered by other brokerages listed here. In addition to employer-sponsored retirement plans, T. Rowe Price offers IRAs, SEP-IRAs, 529 education savings plans, and individual and joint brokerage accounts.
If you’ve left a job with a T. Rowe Price 401(k), you may want to consider lower-cost rollover options before rolling it into a new account at T. Rowe Price.
TIAA is the nation’s largest administrator of 403(b) plans which are investment plans for non-profit and government sector employees. The company has more than $1.3 trillion in assets under management, but it has famously been embroiled in scandals related to its business practices.
While the company’s most egregious acts have been cleaned up, TIAA products still tend to carry high fees. If you’ve left a non-profit or government job, you may want to roll your 403(b) into a rollover IRA rather than leaving it at TIAA.
10. TD Ameritrade
Although TD Ameritrade was acquired by Charles Schwab, it continues to operate as its own (excellent) discount brokerage company. By itself, TD Ameritrade has more than $1 trillion in assets under management, and it consistently ranks as one of the best companies for traders and individual stock investors.
The company’s ThinkOrSwim trading platform helps traders and investors learn and try strategies before they start executing and potentially losing heaps of money. TD Ameritrade also offers managed portfolios and it supports most education, retirement and individual account types.
Are Bigger Brokerages Better?
In general, we don’t recommend apps or brokerages with less than $1 billion in assets, because the companies are too likely to be acquired. Mergers and acquisitions tend to lead to decreased quality of customer service, at least during the transition. So that’s why we believe the size of the brokerage matters.
For brokerages that are growing, once it reaches a certain size, the company can serve the most common investment needs, and provide a differentiated experience based on its strengths. Most of the brokerages on this list offer a mix of high and low-cost products and they serve a variety of clientele.
Why Some Of Our Favorite Brokerages Didn’t Make The List
Some of our favorite investment companies (such as Wealthfront and M1Finance) just didn’t quite make the cut. Both of these companies have less than $50 billion in assets under management. Despite their relatively small scale (at least compared to companies with trillions under management), we respect these contenders in the space.
If you’re interested in finding the best free investing apps, check out this article. It includes several companies that manage billions rather than trillions in assets.
These companies manage to scale using technology which keeps costs low for investors and provides a great investment experience too.
Editor: Robert Farrington Reviewed by: Claire Tak
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