BlackRock, Vanguard, Fidelity, State Street Global Advisors, and Morgan Stanley each operate with more than $1 trillion in total assets under management (AUM). These companies are the biggest 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.
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.
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 offer broad and diversified market exposure through their mutual funds and exchange-traded funds (ETFs).
1. BlackRock
BlackRock (BLK), headquartered in New York City, stands as the largest asset manager globally, with approximately $10.5 trillion in assets under management. Founded in 1988, it initially focused on fixed-income institutional asset management and risk management. Today, it serves a broad spectrum of clients, including pension plans, governments, and individuals across the globe, and is particularly renowned for its iShares brand, which leads in exchange-traded funds (ETFs).
The company is distinguished by its proprietary investment technology, Aladdin, which offers integrated solutions supporting the entire investment process, BLK provides a spectrum of investment services from active management to indexing strategies, emphasizing efficiency and broad market exposure.
2. Vanguard Group
The Vanguard Group, founded in 1975 by John C. Bogle, is headquartered in Malvern, Pennsylvania. It is one of the largest asset managers globally, with $9.3 trillion in global assets under management. Vanguard is known for its client-focused approach, offering low-cost mutual funds and ETFs. It pioneered the first index fund for individual investors and emphasizes investment strategies that are accessible and affordable to all types of investors.
Vanguard operates under a unique structure where the company is owned by its funds (thus by its investors), distinguishing it from competitors typically owned by shareholders seeking profits. This structure allows Vanguard to maintain lower average expense ratios than many other firms, directly benefiting its investors. The firm offers a wide range of investment products, including both active and passive funds, catering to institutional and retail investors worldwide.
3. Fidelity Investments
Fidelity Investments, established in 1946 and headquartered in Boston, Massachusetts, has about $5.3 trillion in assets under management (listed as discretionary assets). The firm is renowned for its extensive array of mutual funds and offers investment and brokerage services to millions of individual investors and institutions. Fidelity is a privately held company, which allows it to maintain a long-term focus without the pressures of quarterly earnings reports. It is also known for its aggressive research and innovative financial products.
Fidelity stands out for its customer-oriented services, providing some of the best customer service in the industry, comprehensive retirement services, and a user-friendly online platform. It offers investment solutions across a wide range of asset classes, including equities, fixed income, real estate, and more specialized sectors like technology and health sciences. The firm also leads in developing advanced technology for financial services, including artificial intelligence systems and blockchain projects.
4. State Street Global Advisors
State Street Global Advisors (SSGA), founded in 1978 and headquartered in Boston, Massachusetts, is the investment management division of State Street Corporation and has approximately $4.34 trillion in assets under management. SSGA is known for pioneering the first ETF, the SPDR S&P 500 ETF (SPY). It is a significant player in the asset management and investment services industry, offering a wide array of ETFs, mutual funds, and institutional strategies.
SSGA distinguishes itself by focusing on innovative investment strategies and is strongly committed to providing solutions that meet a wide array of investor needs. It serves diverse clients, including corporations, pension funds, endowments, and governments worldwide. The firm is recognized for its quantitative and qualitative investment processes, combining advanced analytics with deep market expertise to manage portfolios effectively across a broad spectrum of asset classes.
5. Morgan Stanley
Morgan Stanley (MS), established in 1935 and headquartered in New York City, is a prominent global financial services firm that provides investment banking, securities, wealth management, and investment management services. With assets under management totaling $1.5 trillion, Morgan Stanley is the fifth largest asset manager in the United States. The firm is recognized for its diverse range of investment and asset management services, catering to governments, institutions, corporations, and individuals worldwide.
Morgan Stanley Investment Management (MSIM), the asset management division of MS, offers a broad array of investment products and solutions across multiple asset classes and investment styles. The division includes fixed income, equity, alternative investments, and real estate funds. MSIM is known for its disciplined investment philosophy and commitment to providing innovative financial solutions that meet the evolving needs of its clients.
What Is a Financial Advisory Firm?
Financial advisory firms provide various financial services for their clients, such as mutual funds, exchange-traded funds, portfolio management, estate planning, and more.
How Do Advisory Firms Make Money?
Financial advisory firms earn fees from their clients. In many cases, fees are a percentage of the assets they manage for you.
Is It Worth Paying for a Financial Advisor?
Many people prefer to have a professional manage their money or wealth. Most people, at some point, can benefit from paying a financial advisor for their services. It comes down to your preferences and financial and investing knowledge.
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 Morgan Stanley, which are the largest in the U.S. in terms of assets, offer a vast amount of experience, products, and services.
