E*Trade Assets Under Management
One of the smaller firms in the large-size category is E*Trade Financial, which incorporates both brokerage and
banking activities. The company has 4,200 employees and 30 branch locations.
E*Trade has the following details:
| Assets under management (retail) |
$420 billion |
| Assets under management (corporate) |
$380 billion |
| Revenue |
$2.86 billion |
| Number of customers |
5.5 million |
| Number of corporate services accounts |
2 million |
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E*Trade and Competitors
Mutual Funds
E*Trade has recently increased the number of mutual funds it offers. The broker’s screener returns 8,340 investments that are open to new
investors. Of these, 4,190 come with no transaction fee and no load. Many of E*Trade's rivals, including Merrill Edge and Fidelity, offer fewer
no-load, no-transaction-fee funds; although some
have much more total funds. If a mutual fund isn’t on E*Trade’s NTF list, there is a $19.99 charge to buy, sell, or exchange.
Many criteria are available on the mutual fund screener for searching purposes. Morningstar rating,
Sharpe ratio, return history, total assets, and expense ratio are just a few that can be used. There
are also pre-defined strategies, such as international equity funds and top performing target-date funds.
E*Trade provides a list of funds called the All-Star List. These securities have been pre-selected by E*Trade financial advisors who believe they have a bullish future. The funds are all no-load, although some do have a transaction fee.
A fund’s profile page includes a lot of detailed information, including the prospectus and annual report. Morningstar ratings are also presented.
ETFs
E*Trade hasn’t forgotten about ETF traders, either. As with mutual funds, there is an All-Star list for exchange-traded funds, and the broker provides an advanced ETF screener. There is a comparison tool along with a method to find ETF’s by sector and investment style.
An ETF’s profile page includes lots of important data. News articles relating to a particular fund are displayed, and options chains are available if a fund has derivatives trading. Portfolio breakdown is shown by market cap and geographic region. Some of the more popular funds may have pdf reports from Morningstar and E*Trade.
IRAs
E*Trade has some useful retirement resources. It provides solo 401(k)’s for clients who are self-employed. It also has a suite of
Individual Retirement Accounts, including Roth, Traditional, SEP, and SIMPLE varieties.
The broker’s mobile app presents an assortment of asset allocation options for retirement accounts, and there is a link to open an IRA or rollover an employer's plan.
The E*Trade commission schedule applies to retirement accounts as it does to regular brokerage accounts. However, there are three $25 fees that retirement savers should be aware of. Early withdrawals (those before age 59½) are assessed the fee. Removing an excess contribution also costs $25. And a recharacterization (when you change a contribution from a Roth to a Traditional, or the other way around; or when a Roth IRA conversion is changed back to a Traditional) incurs a $25 charge.
Financial Advice & Managed Accounts
While most of E*Trade’s business comes from self-directed clients, the online broker does provide investment advice and portfolio
management for a fee. E*Trade has a robo-advisory service, and it costs 0.30% per year. It requires a $5,000
deposit to start. The major competitor in this area, JP Morgan Chase,
provides robo-advisory investing completely free.
Human advisors are available, although they’re slightly more expensive. One package requires $25,000 to begin and costs between 65 and 90 basis points. Unlike the robot, this service includes mutual funds in addition to low-cost ETF’s.
Paying between 0.95% and 1.25% will get you stocks. This package, however, requires a steep $150,000 to qualify. There are no commissions charged on trades.
Investors who live near an E*Trade branch could benefit from the financial advice the broker offers, as some of the advisors are located at these offices.
Cash Management
E*Trade hasn’t forgotten the banking needs of its clients. In fact, the broker-dealer operates its own FDIC-insured bank. There are two checking accounts that can be linked to your brokerage account. The first comes with no monthly account fee, although it pays no interest. The first checkbook order is free, and the Visa debit card also comes at no charge.
The second bank account does pay interest (between 1 and 5 basis points), but comes with a $15 monthly fee. This can be avoided by maintaining a balance of $5,000 or more. A direct deposit of at least $200 will also evade the charge. Perhaps the most important difference between the two accounts is that the second option reimburses ATM fees, while the first does not.
Both accounts come with on-line account management, wire transfer service, and a $100 opening deposit requirement.
E*Trade AUM Summary
As we showed in this 2023 brokerage review, E*Trade has a lot of financial services, most of which are competitive with its rivals. However,
in every category the firm underperformed at least one competitor. Although E*Trade used to be weak in the fund category, recent changes have
made the broker a very good choice there.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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