9 Biggest Brokerage Firms by AUM and Active Accounts
Within the landscape of American finance, certain names ascend to the forefront based on their AUM and sheer number of active brokerage accounts. Let's embark on a journey through the ranks of these formidable institutions.
Vanguard and Charles Schwab lead the pack with assets surpassing $9 trillion, collectively catering to millions of investors. Not far behind, Fidelity Investments boasts $4.9 trillion in AUM, followed by J.P. Morgan, Merrill Wealth Management, and Morgan Stanley, each commanding trillions in assets and servicing millions. Meanwhile, the digital frontier sees Coinbase and Robinhood bringing cryptocurrency and stock trading to the masses with innovative platforms. Ally Invest rounds out this list, offering no-frills, efficient online brokerage services.
1. Vanguard
Vanguard's journey began in 1975, radically transforming the investment world with the introduction of low-cost index mutual funds. The company stands unique as it is owned by its fund investors, blurring the lines between customers and owners. Vanguard's early adoption of online platforms in 1995, coupled with a highly-rated app today, cements its status as the largest brokerage firm in the U.S. by account numbers.
2. Charles Schwab
Founded in 1971, Charles Schwab recently overtook Vanguard in terms of AUM, growing its footprint through strategic acquisitions like TD Ameritrade. Schwab is not just a full-service brokerage; it integrates seamlessly with Schwab Bank, providing a comprehensive financial ecosystem for investors and traders alike.
3. Fidelity Investments
Since its establishment in 1946, Fidelity Investments has flourished into a full-service broker with a rich selection of funds and investment products. Fidelity pioneers in global market access and fractional share investments, serving as the go-to retirement savings plan provider in the United States.
4. J.P. Morgan
As one of the oldest entities in this sector, founded in 1871, J.P. Morgan encompasses the breadth of financial services under Chase Bank. The firm makes investing accessible at all levels, from self-directed accounts to those seeking the counsel of a Private Client Advisor.
5. Merrill Wealth Management
Originating in 1914, Merrill Wealth Management merged into the Bank of America family, offering a wide spectrum of investment guidance and options. Its integration with one of the largest banks in the U.S. provides a seamless experience for clients navigating the investment waters.
6. Morgan Stanley
With its inception in 1935, Morgan Stanley has evolved beyond its investment banking roots to serve a diverse clientele, including governments and large institutions. Its global presence underscores its commitment to client service and investment management excellence.
7. Coinbase
In stark contrast to traditional brokerages, Coinbase, established in 2012, democratizes cryptocurrency trading and investment. As a leader in the digital currency space, it simplifies purchasing, selling, and managing cryptocurrencies for a broad audience.
8. Robinhood
Robinhood emerged in 2013 with the vision of making stock trading accessible and free from traditional commission structures. It offers an intuitive platform for investing in various assets, including the burgeoning areas of cryptocurrencies and NFTs.
9. Ally Invest
Ally Invest, part of Ally Bank, distinguishes itself as an online brokerage committed to no-commission investments and user-friendly technology. Its competitive options trading fees and integration with high-yield savings accounts make it a compelling choice for investors.
Investing With the Largest Brokerage Firms
The collective prowess of the largest U.S. brokerage firms lays a solid foundation for individual investors, offering unparalleled access to markets, financial products, and investment strategies. As you navigate this landscape, weigh your investment objectives, preferred account types, and overall fees to align with a brokerage that can amplify your financial growth potential.
Frequently Asked Questions
At their core, brokerage firms serve as intermediaries in the financial market, facilitating the buying and selling of securities. The distinction between full-service and discount brokerages lies in the breadth of services and commission structures. Large brokerage firms typically offer a spectrum of account options tailored to various investment goals and vehicles, ensuring a fit for virtually any investor profile, including those with an interest in cryptocurrency, options, or futures contracts.
