It isn’t always true that more is better. When it comes to money, however, it isn’t much worse.
Following this logic, investors seeking a brokerage business to invest with should consider one of the country’s largest brokers. Larger companies have more resources and can typically give investors more comprehensive and lower-cost solutions.
When it comes to financial organizations, there are a few different ways to gauge their size. You could look at the number of customers the company has, the number of financial advisors it employs, or the amount of money it handles. Any of these measurements can be used as a metric. The measure we’ll be focused on in this essay is assets under management or AUM. However, the majority of these organizations are also top-ranked in the other two metrics.
You can’t go wrong with any of the firms on our list if you want a wide range of investment options. Here are the top brokerage firms in terms of AUM:
- Fidelity Investments
- Vanguard
- Charles Schwab
Fidelity Investments
Fidelity Investments is a powerhouse in the brokerage sector, with an AUM of $10.4 trillion. Fidelity would be the third-largest country in the world by GDP if it were a country.
It’s no surprise that Fidelity is one of the country’s largest brokerage businesses, with more than 35 million customers spread across nine nations. Individual investors make up a little portion of this company’s overall revenue. Fidelity also manages over 22,000 employee benefit programs with over 32 million participants, making it one of the largest 401(k) providers in the United States. It also helps 13,000 other financial institutions by allowing them to use the firm’s investing and technology solutions platform.
Fidelity is best known for its low-cost mutual funds, which have expense ratios as low as zero dollars, but it also offers a suite of Fidelity exchange-traded funds, or ETFs, as well as access to a wide range of third-party products. In a nutshell, Fidelity supports the premise that bigger is better.
Vanguard
Vanguard is one of the largest brokerages in the world, with $7.2 trillion in assets under management (AUM). It is only a few trillion dollars behind Fidelity. Vanguard’s reach is nearly as vast as Fidelity’s, with more than 30 million investors in about 170 countries.
The Vanguard Wellington Fund (ticker: VWELX), which was formed in 1929, is the country’s oldest balanced mutual fund.
Through its index mutual funds and ETFs, it has become known for low-cost, passive investment (thanks to Vanguard Group founder and “father of index investing,” Jack Bogle). With an average expense ratio of 0.09 percent, it now delivers roughly 209 U.S. funds and 232 additional funds to non-U.S. markets.
Charles Schwab
Charles Schwab (SCHW) is another well-known brokerage name, and since its acquisition of TD Ameritrade in 2020, it has risen to become one of the best in the industry.
Schwab’s AUM increased to $6.69 trillion as a result of the transaction. For the time being, the two companies are working independently, but when they merge, changes are likely.
