Choosing a financial advisory firm can be a difficult task, as there are thousands to wade through. Many have specific strengths and offer different ways to invest one’s hard-earned money. It’s always worth doing your research to know which suits your needs and risks best, but choosing some of the largest financial advisory firms can often be a good option. They have proven track records, a variety of products, and significant amounts of transparency.
The following five financial advisory firms operate with more than $1 trillion in total assets under management (AUM): BlackRock, Vanguard, Fidelity, State Street Global Advisors, and J.P. Morgan Asset Management. Each of these companies is one of the best in the industry for different reasons, whether it be low fees and innovation, more than a century of dedicated financial management, or great customer satisfaction.
Key Takeaways
- BlackRock, Vanguard, Fidelity, State Street Global Advisors, and J.P. Morgan Asset Management are the five largest financial advisory firms in the United States, ranked by assets under management (AUM).
- The size of these firms allows them to offer a multitude of services to their clients.
- Many of these financial giants provide offer broad and diversified market exposure through their mutual funds and exchange-traded funds (ETFs).
American investors can choose from thousands of financial advisory firms. The market is top-heavy, which makes sense; a well-known and well-respected name goes a long way in securing assets from families and businesses. It’s no accident that these companies are the top dogs. They have worked hard to become so and have provided consistent positive returns for investors. As such, potential investors can find reasons to like each.
These firms are so large that they offer a multitude of services for all types of clients. Some also provide a broad exposure to the market through the various mutual funds and exchange-traded funds (ETFs) that they offer. Most investors will be able to find what suits their investment needs within the offerings of these firms.
1. BlackRock
BlackRock (BLK) is the largest investment firm in the world. It manages $8.6 trillion in assets as of Dec. 31, 2022. The company has been a proponent of ETFs, and it has gained popularity through its iShares funds.
BlackRock is a powerhouse, operating in more than 30 countries with clients in more than 100 countries.
2. Vanguard
Vanguard has been a revelation in investment management, especially since the turn of the century. Much like Walmart in the retail sector, Vanguard became king of the hill through cheap prices and a huge variety of offerings. The company is famous for its low expense ratios on funds and passive investment management.
With $7.2 trillion in total AUM as of Dec. 31, 2022, Vanguard is the second-largest advisory firm. Of this total amount, 79% is in passively managed index assets. The company lives by the mantra of lower prices and allows investors to keep more of their returns, and customers have responded by flocking to Vanguard in droves.
3. Fidelity Investments
Fidelity Investments earned its name in the brokerage and mutual fund provider spaces. It’s fitting that Fidelity—a word meaning loyalty, support, and faithfulness—is one of the most highly rated investment advisory firms in terms of customer satisfaction and online support.
Fidelity manages nearly $4.2 trillion in assets as of March 31, 2023, and offers a variety of mutual funds for the benefit of all types of investors.
4. State Street Global Advisors
State Street manages $3.5 trillion in assets as of Dec. 31, 2022. It offers investment management services to a broad swath of clients, including retail investors.
State Street was one of the first proponents of exchange-traded funds and manages one of the most popular ETFs, if not the most popular: the SPDR S&P 500 ETF (SPY). This exchange-traded fund tracks the Standard & Poor’s (S&P 500) Index. State Street manages many funds under the SPDR brand name that focus on a variety of sectors, allowing investors to gain access to many areas of the market.
5. J.P. Morgan Asset Management
JPMorgan Chase & Co. (JPM) is perhaps the most important financial institution in U.S. history. The firm is the largest bank in the U.S. and one of the biggest financial conglomerates in the world. Its CEO, Jamie Dimon, is one of the most celebrated financial professionals in the world, often found giving advice to the president and other world leaders.
It’s no surprise that J.P. Morgan is among the five largest financial advisory firms, given its track record and name recognition. Among its targeted advisory groups are other financial institutions, governments, pensions, businesses, and individuals. Its asset management division oversees $2.5 trillion in assets as of Dec. 31, 2022.
What is the best investment management firm?
Choosing the best investment management firm depends on the needs of a particular customer. Some factors to consider include the amount of fees that a company charges and its product offerings. The most well-known financial advisory firms set themselves apart with their market advantages, like elevated customer support or specializing in an asset class like mutual funds or exchange-traded funds (ETFs).
Who are the biggest ETF issuers?
Given the popularity of exchange-traded funds (ETFs), it may be no surprise that the list of the largest financial advisory firms includes the top ETF issuers. The top three ETF issuers by assets under management (AUM) are iShares (BlackRock), Vanguard, and SPDR (State Street Global Advisors).
What do investment companies do?
Investment companies manage, sell,and market funds to the public. While they may differ in terms of ownership, organizational makeup, and client base, these companies generally offer customers a variety of asset classes for investment. The firms may also offer different types of investment services such as portfolio and tax management.
The Bottom Line
When you are searching for an investment firm that best matches your needs, there are plenty of factors to consider. Companies like BlackRock, Vanguard, Fidelity, State Street, and J.P. Morgan, which are the largest in the U.S. in terms of assets, offer a reasonable jumping-off point. With their massive size, these firms can offer investors a range of products and services.
