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When you first start investing, it can be challenging to figure out which broker to choose. Before you open an account, it's worth taking a look at the largest brokerage firms and finding out what makes these companies unique.
The following companies manage more than $1 trillion in assets. With so much money at these brokers, it seems like most of them are doing something right.
Keep in mind that not all of these companies are discount brokers. Some specialize in workplace retirement plans, others are full-service brokers that charge high fees. These are the top 10 brokers based on their assets under management.
1. BlackRock
BlackRock is the largest brokerage firm in the country, managing just over $10 trillion in assets at the end of 2023. BlackRock is known for its iShares funds (also called SPDR funds), which are among the lowest-cost ETFs 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 purchase iShares through most brokerage firms, you can also open retirement accounts, brokerage accounts, and 529 accounts at BlackRock. It supports a range of investment options with commission-free trading and low costs for ETFs and mutual funds.
2. Avant-garde
Vanguard was founded by John Bogle, who advocated low-cost investing philosophies. Bogle was a pioneer of low-cost index funds, which are a portfolio of stocks or bonds that give you a more diverse investment option than if you bought individual stocks. Vanguard offers both actively managed and passive index funds. Headquartered in Valley Forge, Pennsylvania, the company manages over $8.6 trillion in assets.
3. Charles Schwab
With $8.50 trillion in assets under management in 2023, Charles Schwab is a consistent leader for “retail investors.” This is the group that may want access to low-cost funds, some trading opportunities, insights from leading investors, and great investing technology. The company offers automated investing through smart portfolios, socially responsible investment options, and all types of retirement, education, and brokerage accounts.
Charles Schwab is expected to complete the process of transitioning TD Ameritrade customers to the Charles Schwab platform in 2024, after completing its acquisition of the online brokerage firm in 2020. It will be interesting to see what impact this will have on Schwab's asset growth going forward.
4. Loyalty
Fidelity was famously the first to offer a no-fee index fund in addition to its already commission-free trading fees and other services valued by investors. With its variety of cheap and free products, Fidelity manages to offer a great website that offers services like a robo-advisor and socially-focused investing. Thanks to its focus on low fees and customer service, Fidelity manages more than $4.9 trillion in assets.
5. JP Morgan Chase
A favorite in the personal finance community, Chase is known for its above-average credit card rewards and lucrative checking sign-up bonuses. The company manages more than $3.9 trillion in assets for its clients. While most of JP Morgan Chase's products are aimed at high-net-worth individuals, the company's self-directed investing option offers commission-free trading, retirement accounts and other investor perks.
6.Edward Jones
With more than $1.92 trillion in assets under management, Edward Jones Investments is the first company on this list to have no discount component. Investors who choose Edward Jones work primarily with the company's financial advisors, who help investors find the right investment mix.
Compared to most companies listed here, Edward Jones charges high fees and the service you receive depends on the quality of your financial advisor. If you are happy with your Edward Jones investment advisor, it may be worth keeping your investments with the company despite the high fees. However, investors who are less satisfied may want to consider a new financial advisor through Empower or Wealthfront Advisory Services.
7. Goldman Sachs
Goldman Sachs was founded in 1869 and is the second largest investment bank in the world by revenue. The company specializes in advisory services for mergers and acquisitions and restructurings, personal wealth and investment management, and more. According to Macrotrends, Goldman Sachs' total assets were about $1.64 trillion at the end of 2023. Additionally, Goldman Sachs reported a record level of assets under supervision of $2.81 trillion in 2023. According to Goldman Sachs, assets under supervision include “assets under management.” and other client assets over which Goldman Sachs does not have full discretion.”
8. Morgan Stanley (E*TRADE)
Morgan Stanley was another company known for its high-fee, high-customer service, but the company made a bid for the discount market with its acquisition of E*TRADE in late 2020. E*TRADE is best known for its low-cost and free trading platform. It gives users the ability to open multiple accounts including educational 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 processing the account. With the acquisition of E*TRADE, Morgan Stanley now has $1.5 trillion in assets under management.
9. T. Rowe Price
Founded in 1937, T. Rowe Price is a brokerage firm with more than $1.45 trillion in assets under management. While the company has undergone several changes since its inception, it is now best known for its company pension plans.
In general, the funds offered at T. Rowe Price tend to be slightly 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 left a job with a T. Rowe Price 401(k) account, you may want to consider lower-cost rollover options before rolling it over to a new T. Rowe Price account.
10. TIAA
TIAA is the nation's largest administrator of 403(b) plans, which are investment plans for nonprofit and public sector employees. The company manages more than $1.3 trillion in assets but has been notoriously embroiled in scandals related to its business practices.
Although the company's worst actions have been cleaned up, TIAA products still incur high fees. If you left a nonprofit or government job, you may want to convert your 403(b) to a rollover IRA instead of leaving it in TIAA.
Are larger brokers better?
In general, we do not recommend apps or brokers with assets of less than $1 billion as the likelihood of these companies being acquired is too high. Mergers and acquisitions tend to result in lower quality customer service, at least during the transition. This is why we believe the size of the brokerage business matters.
For growing brokerages, the firm can serve the most common investment needs of a certain size and provide a differentiated experience based on its strengths. Most brokerage firms on this list offer a mix of high- and low-cost products and serve a variety of customers.
Why some of our favorite agents weren't on the list
Some of our favorite investment companies (like Wealthfront and M1Finance) just didn't quite cut it. Both companies manage less than $50 billion in assets. Despite their relatively small scale (at least compared to companies with trillions under management), we respect these competitors in this space.
If you are interested in finding the best free investing apps, check out this article. It includes several companies that manage assets worth billions rather than trillions.
These companies manage to scale using technology, which keeps costs down for investors and also provides a great investing experience.
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