We put Merrill Edge to the test in this detailed review. The results: The brokerage service combines excellent features, fees, customer service, technology and educational resources.
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Merrill Edge combines the power and resources of two of America’s leading financial institutions–Merrill Lynch and Bank of America. It functions as a traditional, full-service investment brokerage firm. Yet it also offers a fee structure that’s comparable to major discount brokers.
It offers a full range of investing opportunities, as well as managed portfolio options. The affiliation with Bank of America also gives investors the option to manage their banking through the parent company. This can enable you to manage most or all of your finances through connected platforms.
Meanwhile, the level of investment research and investor education is enough to keep you growing as an investor throughout your investing life.
In this review, we’ll look at the features and fees of Merrill Edge.
Merrill Edge Features
Accounts Offered. Individual and joint taxable accounts; 529 college savings plans, custodial accounts; traditional, Roth and rollover IRAs; individual and small business 401(k) plans; SEP and SIMPLE IRAs.
Available Investments. As one of the largest and best-established investment brokerages, Merrill Edge offers virtually unlimited investment options. These include stocks, bonds and other fixed-income investments, options, mutual funds, and exchange-traded funds (ETFs). They also offer Merrill Edge Select Funds and ETFs, which is a screening process that helps you to narrow down the very large fields of funds, helping you to identify the best ones for your portfolio.
Minimum Initial Investment Requirement. None.
Customer Support. This is one of the strongest features of Merrill Edge. They offer both email and live chat. They can be reached by toll-free phone, 24 hours a day, seven days a week.
Investor Education. Whatever your level of investment experience is, Merrill Edge has the resources to help you become a better investor. They provide resources for beginners, as well as for intermediate and advanced level investors. Resources are available in articles, courses, videos and webinars. They also have a large number of calculators to help you with the math side of investing.
Investment Research. Merrill Edge’s offerings in this area are virtually overwhelming. They provide general market research, as well as specific research on stocks, options, ETFs, mutual funds and fixed-income investments. They also offer BofA Merrill Lynch Global Research, which was named the top global research firm for 2016 by Institutional Investor. It was the sixth year in a row that the service captured the award.
Mobile Trading. The mobile app enables you to track activity in both your Merrill Edge and Bank of America accounts. You can trade on the go, and stay informed with alerts and watch lists. The app is available for iPhone and Android devices, and offers Touch ID for faster access.
The Bank of America Connection
The ability to have your banking and investing activities under one roof is important to many investors (though certainly not all). Merrill Lynch is part of the Bank of America family, which provides a number of interesting benefits to Merrill Edge investors.
You can link your Merrill Edge investment and Bank of America bank accounts online and on your mobile device. You can transfer funds between accounts with both institutions in real-time, without needing to log into two separate websites.
Branch access. Bank of America has more than 2,000 financial centers around the country that you can visit at any time. Each one has a Merrill Edge Financial Solutions Advisor available. So if you like face-to-face contact with your investment activities – in an increasingly online-only world – the Bank of America connection gives you that ability.
As one of the nation’s largest banks, Bank of America offers a full range of banking products. This includes checking and savings accounts, credit cards, certificates of deposit, student banking, small business banking, Health Savings Accounts (HSAs), auto loans and home mortgages.
Preferred Rewards. This program offers a wide variety of benefits, including an interest rate booster on bank saving accounts, and an interest rate discount on auto loans. It also comes with discounted trading on stocks and ETFs in your Merrill Edge account (see Merrill Edge Pricing & Fees below).
You are eligible for Preferred Rewards if you have at least $50,000 in combined balances in your accounts with both Bank of America and Merrill Edge. There are even more benefits if your combined balances total at least $100,000. The combination of account balances from both Bank of America and Merrill Edge enables you to qualify for the program much more quickly.
Merrill Edge Roadmap
When you open a Merrill Edge investment account, you can expect plenty of broker support, even if you’re a committed do-it-yourself investor. It’s called the Merrill Edge Roadmap program.
When you open your account, you’ll have a one-on-one chat with a licensed Merrill Edge Financial Solutions Advisor. The advisor will help you to create your savings and investment goals, as well as a workable portfolio allocation. They’ll work to create an action plan, and you’ll be updated with portfolio reviews every six months.
The advisor might recommend the action plan for a custom portfolio, or suggest taking advantage of one of the Merrill Edge managed portfolios instead.
Merrill Edge MarketPro
This is a premium offering of the Merrill Edge platform. In order to have access to it, you must either make at least 15 trades per quarter, or have combined balances of at least $50,000 between your Merrill Edge and Bank of America accounts.
MarketPro offers real-time market analysis and investment research, including streaming quotes and financial news. This also includes access to Bank of America/Merrill Lynch Global Research, which is one of the best information sources in the investment industry.
MarketPro gives you the ability to track and monitor your portfolio in real-time. You can customize the dashboard and use interactive charting tools. It offers a three-step trading process, that will enable you to take advantage of investment opportunities as they develop.
Merrill Edge Tools
As you might expect from the Merrill Lynch family, Merrill Edge offers a wealth of online tools. Some of the most valuable include:
The Asset Allocator. This tool can add a robo-advisor dimension to your self-directed investing. It compares your portfolio’s asset allocation to your target allocation. It then provides customized recommendations to get you back to your target allocation. You can even include multiple accounts in the analysis.
The College Planning Tool. This feature is actually an offering of several tools to help you with the college planning decision. It provides a wealth of educational resources to help you with that planning, as well as calculators to crunch the numbers.
The Retirement Evaluator. This tool helps you to stay on track for retirement. It analyzes your investment accounts–both your accounts with Merrill Edge and with outside platforms – and gives you a picture of where you’re at, as well as actionable steps to move you toward reaching your goal.
ETF Cost Comparison Calculator. The ETF phenomenon has swept the investment universe. This is largely because they have lower fees than mutual funds. But that doesn’t mean that all ETF fees are equal. The Calculator will enable you to compare funds side-by-side, including comparing ETFs with mutual funds.
Benchmark Return Calculator. Everyone wants to beat the market. But how do you know that you are? And which market is it that you’re hoping to beat? This Calculator will enable you to check the performance of your investments against the specific index for the market you are investing in.
Merrill Edge Pricing & Fees
There is no annual account fee. There is however a $49.95 Closeout Fee that applies on full account transfers. Merrill Edge doesn’t charge for partial account transfers.
Transaction fees are as follows:
Stocks and ETFs: $6.95 per trade; broker-assisted, $29.95 per trade
You can also take advantage of $0 trades: up to 30 per month–under the Preferred Rewards Platinum program–and up to 100 per month as a Preferred Rewards Platinum Honors client. You are eligible to enroll in Preferred Rewards if you have an active, eligible Bank of America personal checking account, and maintain a three-month average combined balance in your Bank of America and Merrill Edge accounts of at least $$50,000 for the Preferred Rewards Platinum program, or at least $100,000 for Preferred Rewards Platinum Honors.
Mutual Funds: $19.95 per trade; broker-assisted, $29.95. There are no fees charged on load-waived funds or on no-load, no transaction fee funds (NTFs), though there is a $39.95 short-term redemption fee that applies if the fund is held for less than 90 days.
Options: $6.95 per trade, plus $0.75 per contract; broker assisted $29.95 per trade, plus $0.75 per contract. Exercised/assigned options are $6.95 per trade.
Bonds and Fixed Income: price and yield as quoted–no additional fee. This includes US Treasury and agency securities; corporate, government and agency zero-coupon bonds; municipal and corporate bonds; and brokered certificates of deposit.
Margin Rates: as follows (effective June 16, 2017):
Merrill Edge Managed Portfolio Options
They currently offer two managed portfolio options:
Merrill Edge Guided Investing–MEGI
Merrill Edge has recently rolled out its new robo-advisor service, MEGI. Like other robo-advisors, MEGI determines your risk tolerance and investment goals, and constructs a portfolio based on those results. Your portfolio is comprised entirely of index-based ETFs.
But it’s a robo-advisor with a twist. Unlike most robo-advisor platforms, which offer fully passive investing, MEGI offers what they refer to as asset allocation based on tactical strategic shifts. That means that if the investment environment shifts, your portfolio will be adjusted to reflect the changes. For example, if there are indications that emerging markets are going to outperform the US market, allocations may shift in favor of emerging markets.
Within the MEGI program, you can establish goals for various purposes, like saving for your children’s college education, then set up an account specifically for that goal. There is no limit on the number of goal-based accounts you can have. And of course, MEGI can also be used for IRA accounts.
MEGI requires a minimum initial investment of $5,000, and has an investment advisory fee of 0.45% per year.
Merrill Edge Select Portfolios
This is Merrill Edge’s professionally managed portfolio. Merrill Lynch analysts actively monitor and manage your portfolio. You will also meet with a Merrill Edge Financial Solutions Advisor at least semiannually for reviews of your portfolio.
Select Portfolios offers you a variety of portfolios, from more conservative to more aggressive. It requires a minimum initial investment of $20,000, and comes with an annualized program fee of 0.85%. That includes execution costs.
Either MEGI or Merrill Edge Select Portfolios will provide you with the ability to have some or all of your portfolio professionally managed, if that’s your choice. In that way, you can have the best of both worlds – a do-it-yourself portfolio in combination with managed options.
Merrill Edge Pros and Cons
Wide Variety of Accounts
Seamless Trade Execution
Backed by BOA - Excellent Customer Service
Robo Option Available
High $6.95 Per Trade Cost
Minimum $5,000 Investment Required for MEGI
Should You Invest with Merrill Edge?
Other investment brokerage platforms may be better in a category or two, but Merrill Edge is the full package. Whether you’re a novice or an advanced investor, Merrill Edge can help you to up your game. The volume of investment research and investor education is exhausting – there is so much that you may never use it all.
The platform gives you the advantage of self-directed investing, but also provides managed portfolio options for those who prefer hands-off investing. You don’t have to choose to do one or the other either. Some of your portfolio can be self-directed, while the rest is managed. It’s an excellent option to have.
Merrill Edge is an excellent brokerage choice for the many Bank of America customers. It enables you to effectively invest where you bank. It also will make it easier for you to qualify for the trading benefits that come with Preferred Rewards, since the program counts balances in both BofA and Merrill.
For non-BofA customers, Merrill Edge is probably a better platform for less experienced investors. Trading commissions are about the middle of the discount broker range, which will discourage very active traders. But the relatively low fees, in combination with strong customer support, investor research and education, and the availability of managed portfolios make Merrill Edge an outstanding choice for less experienced and less active investors.