Brokers With The Most Clients
Brokers with the most clients are often looked for by potential retail investors looking to get started with a firm that has an established customer base and service set with an expectation to be safer. In this guide we break down five of the largest brokers by clients, highlighting the advantages and drawbacks of each, to help you make your choice.
What Is A Broker?
Before discussing the brokers with the most clients, we should first define a broker. Brokerage firms, or brokers, trade securities and derivatives, like stocks and CFDs, on behalf of their clients. Brokers exist largely because it is difficult for most individuals to directly access stock exchanges, which usually permit only licensed members to trade. For example, to buy or sell stocks on the New York Stock Exchange, brokers must belong to a member firm and be licensed by the FINRA. It is possible to buy stocks directly from companies but it is usually much more convenient to use a broker. Before the internet age, brokers made money by charging clients commission, which took the form of a percentage of assets, flat rate or hourly fee.
Trading used to be done mostly through full-service brokers, who provided clients with investment advice in addition to completing transactions. The high costs of using these brokers meant that only high net-worth investors could access the stock market. These days, however, the growth of online discount brokers has meant that many more individuals can trade in stocks and shares. Discount brokers provide their clients with fast, direct trading for little or no commission. Unlike full-service brokers, these brokers do not offer their clients investment advice or analysis. Instead, clients can control their own trades using an online platform. Recently, online brokers have begun to offer clients automated financial planning services through robo-advisors.
Rather than charge clients commission, online brokers turn a profit using several creative methods. One of the primary ways is through payment for order flow, wherein the broker receives a small commission for directing an order to a particular market maker. This process is somewhat controversial as there is a lack of transparency about how it works. Brokers also generate money from interest on uninvested cash, as well as by lending margin securities to other parties.
Top Five Brokers With The Most Clients
Fidelity Investments takes the top spot of our brokers with the most clients list, maintaining its position by a significant margin with over 38 million brokerage accounts. On top of this, Fidelity’s managed assets total up at a whopping $10.4 trillion, while its turnover in 2019 was $21 billion, making it one of the online trading world’s major players.
Fidelity was founded way back in 1946 and made the move into online brokering in 1995. It is renowned for providing its clients with a well-rounded, reliable service and excellent trading tools. The quality of Fidelity’s research and educational resources are particularly good, making them a good broker for inexperienced and/or casual traders. Fidelity has a broad selection of clients, from beginner to expert, and can provide customers with individual investment advice if needed.
In terms of commission, Fidelity charges 0% commission on stock/ETF trades. On options trades, the broker charges $0.65 per contract. Fidelity clients can trade a standard range of assets, including stocks, ETFs, bonds, options and mutual funds. However, futures and cryptocurrency are missing from their range of offerings. Clients must be based in the US to trade with Fidelity.
As one of the first discount online trading platforms, Robinhood rapidly grew to the second biggest broker with the most clients, boasting 31 million customers. Robinhood is known primarily for its beginner-friendly mobile app, which focuses on the basics of trading.
Robinhood customers can trade a decent range of stocks, ETFs, options and cryptos. However, they do not offer trading in mutual funds, forex or futures. Their clientele tends to be younger and they are a good broker for lower-capital investors as they offer part shares and competitive fees. The limited range of assets available means that that they are probably unsuitable for more advanced traders.
Despite being one of the pioneers of commission-free trading, Robinhood has come under fire recently for some of its business practices. They were recently ordered to pay out $70 million as a penalty for misleading clients, approving ineligible traders for risky strategies, and repeated system collapses on their platform.
eToro is a British/Israeli online brokerage company sitting at third place in our ranking of brokers with the most clients. As of 2021, eToro had over 20 million registered clients, some of the highest numbers of any broker. They also have over $8 billion in managed assets. eToro’s revenue in 2020 was over $600 billion. The broker specialises in social trading, where investors can see the activity of other traders, including experts. This means that eToro clients can engage in copy trading.
Originally founded in 2007 as a forex trading platform, eToro has since expanded its range of assets and is a market leader in crypto trading. Additionally, investors can now trade with 53 ETFs, 12 market indices, 7 types of commodities and 957 company stocks. eToro’s web platform and mobile app are easy to use and support 24/7 trading.
Like many other online brokers, eToro does not take a commission on stock or ETF trading. It also charges low fees on forex, CFD and crypto trading. However, the broker does charge clients a $5 fee on withdrawals. Currently, eToro accepts clients from many countries including the UK, Australia and most European states. US users may only trade cryptocurrencies. It is worth noting that eToro is blocked in several countries, including India, so please check their website for more details.
With 14.1 million active clients, Charles Schwab is one of the largest online brokers with the most clients. The Charles Schwab Corporation has grown from a small investment newsletter into the third-largest asset manager globally, with $7.57 trillion held in client assets and revenues of over $11.6 billion in 2020.
Charles Schwab has targeted its services at a wide range of customers: the broker offers clients several trading platforms, including a web-based interface, mobile app and desktop application. The number of trading tools and customisation options accessible on these platforms is impressive. Schwab’s customer service is highly regarded, whilst the broker also offers its clients both robo and in-person advisory services.
As standard, Charles Schwab does not charge clients on stock or ETF trades. Customers can also trade in mutual funds, options and some futures. For those looking to do forex or crypto trading, it may be advisable to look elsewhere, as Schwab’s offering in these areas is very limited. Options traders may also find other platforms cheaper to use.
Webull is fifth on our list of brokers with the most clients, boasting just over 12 million users, making it one of the biggest online stockbrokers offering trading on stocks, ETFs and options. Founded in China in 2017, Webull is still Chinese-owned, although the company’s headquarters are in New York. Traders in some countries like the UK cannot access Webull’s platform, so please check online if it is available in your territory.
Webull does not charge clients commissions on options (as well as stocks and ETFs), placing it at the cheaper end of the online broker scale. Webull’s platform is suitable for a casual or beginner investor but the slightly limited range of tools probably makes it unsuitable for more serious traders. The broker’s mobile app is simple to set up and easy to use. As Webull is a relatively new company, however, the range of assets is limited. Their forex and crypto selections, for instance, are smaller than many of their competitors.
Pros Of Brokers With The Most Clients
Some of the advantages of using the top brokers with the most clients include:
- Wide range of assets available
- Robo-advisors may be provided
- Cheap, commission-free trading
- Trustworthy and reliable service
- Part share trading for smaller investors
- Well-developed, user-friendly trading platforms
- Can start trading without a large amount of capital
Final Word On Brokers With The Most Clients
Brokers with the most clients encompass those brokerage firms offering assets from equities and forex derivatives to cryptocurrency binary options and maintaining a client base of millions of clients across the world. Generally, a broker with so many clients is likely to have a decent range of assets, low prices and strong levels of customer service. However, as with all things, new and innovative alternatives are constantly cropping up that may offer better or cheaper solutions, so you should always keep your ear to the ground.
Which Brokers Have The Most Clients?
Some of the stock brokers with the most clients include established firms like Charles Schwab and Fidelity, as well as newer companies like eToro and Webull. Some of the largest brokers not included in this list are ETRADE, TD Ameritrade and Merrill Edge. These are mostly online discount brokers who offer commission-free trading.
What Are Some Of The Cheapest Brokers With The Most Clients?
Webull and Robinhood are two of the cheapest large brokers. All online discount brokers, however, do not charge clients commission on stocks or ETFs as standard.
What Are The Top Brokers With The Highest Client Numbers?
Brokers with the most clients may seem indiscernible but there are some key differences. Firms like Charles Schwab and Fidelity provide good all-round trading platforms and reliable service, suitable for traders with various levels of experience and quantities of cash. Apps such as eToro, Robinhood and Webull are great for younger and less experienced clients looking to get their foot in the door. This is thanks to their simple mobile platforms, offers of part shares and low commission.
How Big Are The Brokers With The Most Clients?
While many big brokers boast hundreds of thousands of clients, the true heavyweights service many more customers. Fidelity, the largest broker in the world, has 38 million clients, followed by Robinhood, with 31 million.
Are Brokers With The Most Clients Better?
Not necessarily. Brokers that have amassed client bases of tens of millions are likely to be relatively safe, offering competitive services with good customer service. However, there may be a newer brokerage firm just starting out, offering innovative alternatives and better services that has yet to build the same client base.