There are dozens of securities companies in the United States. However, the four major companies stand out by their name, offerings, total amount of client assets, and the number of clients providing services. They are often referred to as the “Big Four Accounting Firms”. Charles Schwab, Fidelity Investments, E * TRADE and TD Ameritrade are the leaders in terms of clients and assets.
In this short article, we will analyze the products, services, and fee structure of each brokerage firm. They are not listed in any particular order.
- Charles Schwab is a leading US equity broker with $ 4.04 trillion in client assets and 12.3 million active brokerage firms.
- Fidelity Investments has total customer assets of $ 7.3 trillion and active brokerage accounts of $ 30.8 million, making it suitable for customers who want to invest in Fidelity ETFs and investment trusts.
- E * TRADE is a pioneer of online brokerage firms, renowned for its full-featured mobile apps, leading options trading tools and customizable user experience.
- With extensive research and investor education tools covering all levels of investment expertise, TD Ameritrade is the best choice for both active and new investors.
Charles Schwab was founded in 1971 and is based in San Francisco. It is one of the leading investment intermediaries and IRA custodian companies in the United States.
As of December 31, 2019, Charles Schwab has $ 4.04 trillion in client assets and a total of 12.3 million active brokerage accounts. It also operates Schwab Bank, one of the largest banks in the United States, allowing brokerage clients to link their checking and trading accounts. The company boasts 1.4 million active bank accounts as of the end of 2019. Schwab really shines with a Registered Investment Advisor (RIA) account with $ 1.9 trillion in assets under management (AUM).
The company offers clients a range of investment products such as stocks, mutual funds, exchange traded funds (ETFs), money market funds, fixed income products, options, futures, insurance and annuities. Clients can invest in both Schwab’s own products and other third-party investments.
Charles Schwab pricing
The country’s first real discount brokerage firm, Schwab, is consistently rated as one of the cheapest brokerage firms in the United States. Beginning in October 2019, Schwab has reduced fees for all US and Canadian stocks, ETFs, online options, and mobile transactions from $ 4.95 to $ 0.00. Options trading has a standard $ 0.65 fee per contract.
Operating cost ratio (OER) fees for actively managed investment trusts range from 0.21% to 1.92%. Fees for passively managed investment trusts range from 0.02% to 0.39%. Schwab’s annual portfolio management fee starts at 0.80% of Schwab’s private client accounts. These fees are reduced for clients with high asset levels.
The company also provides clients with a worry-free, passive approach to investing through a robo-advisor service called the Intelligent Portfolio. The online platform provides clients with an automated experience and access to a set of ETFs that rebalance according to their investment goals. This service requires an investment of at least $ 5,000 and does not require any advisory or fees.
On November 25, 2019, Charles Schwab announced plans to acquire competitor TD Amelie Trade in a stock transaction worth approximately $ 26 billion. Schwab expects the sale to be completed by the end of 2020, with a full integration of the two companies expected to take 18 to 36 months.
Fidelity Investments is the nation’s largest keeper of a 401 (k) retirement savings plan. Founded in 1946 as Fidelity Management & Research, the company is based in Boston.
According to the company’s website, Fidelity has $ 7.3 trillion in client assets and 30.8 million active brokerage accounts as of March 31, 2020. The company also boasts more than 2.2 million entrusted transactions per day with 32 million individual investors.
Fidelity is the best choice for brokerage clients who also want to invest in Fidelity ETFs and investment trusts. The company also offers investments in third-party products.
Fidelity Investments pricing
Fidelity advertises that there are no zero account fees and minimums to open a retail brokerage account, including the IRA. Following Schwab’s lead, Fidelity also offers fee-free equity, ETF, and options trading. Options trading has a standard $ 0.65 fee per contract.
There is no minimum amount to invest in a Fidelity Mutual Fund. Fidelity does not charge a cost-to-cost ratio fee to a particular proprietary mutual fund and offers hundreds of other funds without transaction fees.
Portfolio advisory service fees range from 0.50% to 1.50% based on your investment. The minimum investment amount ranges from $ 25,000 to $ 250,000 based on the investment options. For the automated Fidelity Go service, the company charges an advisory fee of 0.35%, but you do not need a minimum account to open an account.
Through mutual funds and other advisory services, Fidelity has tens of millions of non-broker clients. This is something no one else can claim.
E * TRADE
Founded in 1982, E * TRADE started as a holding company and transformed into a major online discount brokerage service. The company was hit hard during the 2007-2008 financial crisis due to its high exposure to the subprime mortgage portfolio. Shares fell 86.7% in 2007 before the company implemented a comprehensive turnaround plan.
The turnaround was successful and E * TRADE has become a leading financial company with mobile accessibility, online trading tools, and a customizable user experience. As of February 2020, E * TRADE has more than 5.2 million retail brokerage accounts and client assets of more than $ 360 billion.
Like other top brokers, E * TRADE provides clients with access to ETFs, investment trusts, equities, options and fixed income products. The company also offers two checking accounts and a $ 1.25 million FDIC-insured savings account. Clients can also choose a pre-built portfolio that offers a diversified portfolio of investment trusts or ETFs built by the investment strategy team.
E * TRADE pricing
In 2019, E * TRADE joined Schwaband Fidelity and offered free transactions. E * TRADE will reduce stock, option and ETF trading fees to $ 0 each and charge $ 0.65 each for option contracts ($ 0.50 for more than 30 transactions per quarter).
On February 20, 2020, investment banking firm Morgan Stanley announced that it would acquire E * TRADE in an all-stock transaction worth approximately $ 13 billion. The acquisition is expected to close in the fourth quarter of 2020.
TD Ameritrade was founded in 1971 and is headquartered in Omaha, Nebraska. After the former Ameritrade acquired the TD Waterhouse Group in 2006, the company became TD Ameritrade. In 2017, we acquired St. Louis-based rival Scottrade. The client account was fully integrated and by February 2018 it was integrated into the TD Ameritrade system.
TD Ameritrade is considered one of the top brokerage firms in the United States because of its value and quality of service. The company provides clients with a 24/7 customer support system. A user-friendly website with mobile access, research and advanced trading tools. The company is considered a top broker for novice investors.
According to the company’s website, TD Ameritrade has over $ 1 trillion in client assets. In addition, with over 11 million client accounts, clients make an average of 500,000 transactions per day.
Investment products range from stocks, ETFs, investment trusts, options and fixed income investments. Clients can also choose to invest in futures and forex currencies.
TD Ameritrade pricing
TD Ameritrade does not require a minimum account amount, no platform fees, and no minimum transaction amount. TD Ameritrade offers fee-free transactions and does not charge fees for online transactions …