The United States has many different stock brokerage firms, but four have risen above the rest in terms of both number of clients and assets managed. The top four stock brokerage firms in the United States include Charles Schwab, TD Ameritrade, Fidelity Investments, and E*Trade but with Schwab’s purchase of TD Ameritrade, this number will soon change to three. Each of these firms offer many similar products and services, but each have also managed to carve out a unique niche for itself within the brokerage industry.
Charles Schwab
As of June 30th, 2019, Charles Schwab had $3.7 trillion in assets and 12 million brokerage accounts. Charles Schwab Bank, a subsidary of Charles Schwab, is one of the largest U.S banks. Having a bank lets Charles Schwab provide customers with the options of linking a brokerage account and checking account. Schwab offers clients proprietary products and third-party investments. In October, Schwab announced that it would soon offer commission free stock trades. The move gained a lot of media attention and helped to cement the company’s title as a leading discount brokerage firm.
In late November of 2019, Charles Schwab announced that it would be purchasing TD Ameritrade. The size of the new company means regulatory approval must first occur, but after than, it’s estimated that the two firms will be integrated within 18 to 36 months.
TD Ameritrade
TD Ameritrade, soon to be part of Schwab, began as simply Ameritrade. This changed in 2006 when Ameritrade acquired TD Waterhouse USA. In 2017, TD Ameritrade grew even further with its acquisition of Scottrade. TD Ameritrade now has over $1 trillon in assets and 11 million client accounts. TD Ameritrade has tried to separate itself from its competitiors with a focus on service. The brokerage firm offers 24/7 customer service, research, advanced trading tools, and a user-friendly website.
Fidelity Investments
Fidelity is the biggest keeper of 401(k) retirement savings plans in the United States and is the largest provider of 403(b) plans. As of September 30th, 2019, Fidelity had 7.8 trillon in assets, 72 million accounts, and 30 million individual investors. Fidelity offers many ETFs and mutual funds, as well as products from third parties. Fidelity has tens of millions of additional clients beyond its brokerage clients, thanks to the mutual funds and advisory services it offers.
E*Trade
E*TRADE is considerably smaller than the other big four stock brokerage firms, with fewer clients and a considerably smaller amount of assets. Though smaller, E*TRADE has made a name for itself within the rapidly expanding area of mobile and online accessibility. E*TRADE took more of a hit in the 2008 financial crisis than many of the other stock brokerage firms, since the company had heavily invested in subprime mortgages, but the brokerage firm has since had a strong comeback.
These brokerage firms stand head and shoulders above all other brokerage firms in the industry. Due to this, the decisions these top firms make have the potential to affect the entire industry and are therefore worth knowing and watching.
Introductory Courses
About the New York Institute of Finance
The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in-class, in over 120 countries.
See all of NYIF’s training and qualifications here.