More isn’t always better. When it comes to money, though, it certainly isn’t worse.
Following that logic, investors looking for a brokerage firm to invest with may do well to choose from one of the largest brokers in the nation. Larger firms have more resources and can often provide more comprehensive and lower-cost solutions for investors.
There are a few ways to measure size when it comes to financial firms. You could look at how many customers the firm has, how many financial advisors it employs or how many assets it manages. Any one of these metrics is a useful gauge. For the purpose of this article, the metric we’re focusing on is assets under management, or AUM. That said, most of these firms are top-ranked in the other two metrics as well.
If you’re looking for breadth in investment choices, you can’t go wrong with any of the firms included in this list. Here are five of the largest brokerage firms by AUM:
— Fidelity Investments
— Charles Schwab
— JPMorgan Securities
With a whopping $10.4 trillion in AUM, Fidelity Investments is a behemoth in the brokerage industry. If the firm were a country, Fidelity would be the third largest in the world by GDP.
With more than 35 million customers across nine countries, it’s not surprising that Fidelity is among the biggest brokerage firms in the nation. Individual investors are only one part of this company’s corporate pie. Fidelity is also one of the largest 401(k) providers in the U.S., managing more than 22,000 employee benefit plans with more than 32 million participants. It also supports 13,000 other financial institutions by letting them leverage the company’s platform of investment and technology solutions.
Fidelity is known for its low-cost mutual funds — which go as low as zero dollars in expense ratios — but it also provides a suite of Fidelity exchange-traded funds, or ETFs, as well as access to a variety of third-party products. In short, Fidelity gives credence to the theory that bigger can be better.
Coming in only a few trillion dollars shy of Fidelity at $7.2 trillion AUM, Vanguard is another of the largest brokerages in operation today. With more than 30 million investors in about 170 countries, Vanguard’s reach is nearly as broad as Fidelity’s.
Since then, it has become known for low-cost, passive investing (compliments of Vanguard Group founder and the “father of index investing,” Jack Bogle) through its suite of index mutual funds and ETFs. It currently provides around 209 U.S. funds and 232 additional funds to non-U.S. markets with an average expense ratio of 0.09%.
Charles Schwab ( SCHW) is another familiar name in the brokerage industry, and after its acquisition of TD Ameritrade in 2020, it’s now among the largest brokerages, too.
The acquisition brought Schwab’s AUM to approximately $6.69 trillion. For now, the two firms are still operating individually, but changes are expected to occur in the future as two become one.
Schwab has 14.1 million active brokerage accounts under its umbrella, as well as nearly 150,000 retirement plan accounts with $72.6 billion in assets and more than 224,000 self-directed brokerage accounts. Schwab provides customers with access to 15,880 funds from 865 mutual fund families on its platform.
Merrill Lynch Wealth Management
As the investment and wealth management division of Bank of America ( BAC), Merrill Lynch Wealth Management has a big financial institution at its back.
Combined assets across all of the Bank of America wealth management businesses, including Merrill Lynch Wealth Management, Bank of America Private Bank, Merrill Edge online brokerage and Merrill Guided Investing are approximately $4 trillion. Merrill Lynch Wealth Management accounts for around $2.9 trillion of those assets under management.
The firm employs more than 14,000 financial advisors across all 50 states who provide individual investors and businesses with investment and wealth management services through one-on-one relationships with wealth advisors. Merrill also provides workplace retirement solutions through its Financial Life Benefits suite. The latest addition is a retirement digital investment advisory program called Personal Retirement Strategy, which launched in mid-2021. The program is designed to help you define and work toward achieving your retirement goals through your company-sponsored 401(k) plan.
JPMorgan Asset and Wealth Management
JPMorgan is one of the oldest as well as largest brokerage firms around. The firm’s roots go back to 1799, when The Manhattan Company, predecessor to JPMorgan Chase & Co. ( JPM), was founded to provide drinking water to residents and shortly thereafter created The Bank of the Manhattan Company.
Today, JPMorgan is more than just a private bank; the firm provides asset and wealth management services through its JPMorgan Asset and Wealth Management business, which manages approximately $2.4 trillion in investments. Like others on this list, JPMorgan provides company retirement plans in addition to individual investor services. The firm offers a variety of investment strategies, from equity and fixed income to alternatives and multiasset solutions.
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