Review of Merrill Edge self directed brokerage account: pros and cons, commissions and fees, minimums, rating, trading platform, research tools, education, and customer service.


Merrill Edge Rating:  3.5-star brokerage firm rating

  • Stocks & ETFs: $2.95
  • Options: $2.95 + $0.65 per contract
  • Mutual Funds: $19.99

Overview of Merrill Edge

Merrill Edge is Bank of America’s online discount brokerage firm. Although affiliated with full-service firm Merrill Lynch, Edge is a very different beast. With this article, you’ll know where the discount broker excels, and where it falls short.

Customer Support

Merrill Edge Customer Rating

Merrill Edge has associates on the phone 24 hours a day, 7 days a week. Besides its domestic number, there is also an international number for clients who travel outside North America. Unfortunately, we didn’t find a chat function inside our Merrill Edge account, either in robo or human format. The broker does provide chat to guests who aren’t logged in.

We did find a decent self-service center on the website. There are several functions, such as establishing or modifying paperless settings, changing login credentials, and updating an address or e-mail. One really nice feature Merrill Edge provides is a free FICO score.

While we did like these perks, we were disappointed to discover that Merrill Edge has zero branch locations. The broker does have some offices inside select Bank of America locations; but these have no customer service functions. They are only for investment advisory clients.

Portfolio Management and Investment Advice

Merrill Edge Investments Rating

Merrill Edge has a low-cost portfolio management service called Merrill Guided Investing. For just 0.45% per year and a $5,000 starting balance, customers can receive professional trading decisions from licensed Merrill Lynch investment advisors. It is not a robo program. These are actual human advisors who decide what to buy and what to sell. Moreover, Bank of America Preferred Rewards members (discussed shortly) pay only 30 basis points per year. Merrill Guided Investing is an online program, so there are no in-person consultations.

A second program brings in the one-on-one working relationship with an advisor at a Bank of America location. The cost is 0.85% (although a discount of 15 basis points is available to Preferred Rewards members). There is a minimum deposit requirement of $20,000.

Pricing

Merrill Edge Fees Rating

Stock and ETF transactions at Merrill Edge are $2.95. Using the company’s automated phone service is the same price; although using a live rep costs $29.95. In either case, option contracts are an extra 65 cents each. Exercises and assignments are $2.95.

Because Merrill Edge is owned by Bank of America, some banking clients get reduced commissions. Preferred Rewards customers with $20,000 in assets get free equity trades.

Online and rep-assisted trades of new issues of bonds come with zero commissions, although there is a markup/markdown in the price. Treasuries are $29.95 per transaction when ordered over the phone (auctions cannot be traded online). Secondary trades have no commissions when placed online. Other fixed-income transactions are $1 per bond with a $250 max and a $10 minimum.

Merrill Edge imposes no account minimum and no on-going account fees, such as annual or maintenance charges. The broker-dealer does charge a $49.95 ACAT fee to transfer a full account out.

Retirement and Education Accounts

Merrill Edge IRA Rating

Besides self-directed accounts, Merrill Edge offers tax-advantaged retirement and education accounts. There is a 529 plan (it comes with a $25 annual fee), and a custodial UGMA/UTMA account (it comes with no annual fee and no account minimum).


Merrill Edge Education


On the retirement side, the brokerage house offers a large suit of IRA’s, including SEP, SIMPLE, and Rollover. Closing an IRA costs $49.95.

401(k) plans for small businesses (setup fee of $390 plus monthly fee of $94) and self-employed persons (setup fee of $100 and monthly fee of $20 or $25) are also available.

Mutual Funds

Merrill Edge Mutual Funds Rating

With Merrill Edge’s mutual fund screener, we found just 3,148 funds open to new investors. Out of these, 706 have neither load nor transaction fee. A short-term redemption fee of $39.95 is assessed against a sale of one of these funds if it is held less than 90 days.


Merrill Edge Mutual Funds Review


Trading a fund with a transaction fee costs $19.95 online ($29.95 with a rep over the phone). The charge is applied to purchases, sales, and exchanges.

While these aren’t very competitive numbers, we did like the broker’s Select® Funds. These are mutual funds divided into category that are selected based on cost and performance. There is no charge to access this list. Some of the categories include International Equity and Non-taxable Fixed Income.

On the broker’s website, a mutual fund section displays learning resources for mutual funds (courtesy of Morningstar), a tool to sign up for automatic investments, and pre-defined screens, such as socially-responsible funds. Another section shows news articles pertaining to mutual funds.

ETF's

Merrill Edge ETF Rating

As for exchange-traded funds, Merrill Edge manages to deliver all US-listed ETF’s. There are Select® Funds that have been chosen by the company’s financial pros for their predicted outperformance. One we found is the Vanguard Mid-Cap Value ETF (ticker symbol VOE). It is rated five stars by Morningstar and pays a 2.4% dividend.

An ETF hub presents ETF learning materials (both in article and video format). There is also a list of the day’s most active ETF’s and ETF’s with unusual volume. Fund profile pages present both Morningstar and Lipper ratings. Merrill is one of the few brokers in the U.S. to use both analysts. Popular funds also have pdf reports from CFRA.

What we didn’t like about Merrill’s ETF performance was its failure to deliver a list of commission-free ETF’s.

Website Trading

Merrill Edge Trading Rating

A recent update to the Merrill Edge website has eliminated its trade bar. This is a huge disappointment as the tool was the crown jewel of its website trading. Nevertheless, there are still some good resources, such as a watchlist, alerts, streaming quotes (in a separate window), calculators, and more.


Merrill Edge Review


Charting on the site delivers some valuable tools. We found comparisons, technical indicators (about 30), and multiple chart settings. The software is able to display 20 years of price history. The one downside is the lack of full-screen charting.

The site’s trading ticket has some decent features, such as trailing and stop orders. Trailing orders can be set up as market or limit, and in dollar or percent terms. There are only two duration choices (day and GTC). A calculator icon is present to convert a dollar amount into number of shares.


Merrill Edge Options Review


Mobile Trading

Merrill Edge App Rating

During our testing with an iPhone, we noticed that Merrill’s app has Touch ID, the first highlight among several in this category. Other perks include bill pay, check deposit, alerts, and a watch list. The free FICO score can be accessed from the mobile system as well.


Merrill Edge App Review


The order ticket for stocks and ETF’s has the same features as its website cousin. This includes extended-hours trading and bid-ask figures. Besides equities, options and mutual funds can be traded on the app.

Charting on the mobile platform comes with four display choices (candlestick, OHLC bars, mountain, and line). There are about 30 technical studies (just as on the website), and 4 company events (more than the website offers). A graph can be rotated to display in horizontal mode.

Missing on Merrill’s app is live streaming of financial news.

Other Tools

Merrill Edge Tools Rating

Merrill Edge has an app for Apple Watch. During our investigation, we were able to access a watchlist (and edit it), look at the day’s most active equities, monitor the market’s big indexes, and see small graphs.

The highlight in this category is the broker’s desktop software, MarketPro®. Unlike the website, a chart on MarketPro can be expanded full screen. There are also many drawing tools, which the website lacks. Technical studies, customization, comparisons, and multiple graph styles are other high points. Technical analysis from Recognia also makes an appearance.


Merrill Edge Market Pro Review


While the order ticket delivers several nice features, such as multiple duration and trade types, we didn’t find direct-access routing, one of the software’s few failures.

Another disappointment is trading minimums. Merrill requires 15 trades per quarter (or $50,000 in assets within the Bank of America family) to use the software.

Some features we hoped to see are missing in this category: a skill for Amazon Echo and an app for Apple TV.

Investment Education and Stock Analysis

Merrill Edge Investing Rating

Merrill Edge customers have access to a lot of learning materials. The website hosts articles and videos that cover a lot of investment ground. We found resources on dollar-cost averaging, portfolio rebalancing, asset allocation, and how to use a 529 plan. An e-newsletter is available to Merrill clients every three months.

The broker’s equity screener can search by many criteria. Exchange (including the over-the-counter market), dividend yield, institutional ownership, P/E ratio, and volume are just a few examples. Clicking on a blue down arrow next to a stock symbol in a scan’s results produces a drop-down menu of several selections, such as trade, compare, add to a watchlist, and set up an alert.

A stock’s profile offers lots of useful features. These include news articles and technical analysis tips from Recognia. Equity reports are available to download in pdf format from Morningstar, CFRA, and S&P Global. Option chains are displayed for stocks that have them. The Merrill site also shows a lot of earnings information, including trends and surprises.

Merrill’s site also provides access to Trefis® Price Analysis free of charge. This great service gives a price estimate based on a stock’s products and inflows.

Banking Features

Merrill Edge Banking Rating

The first method to secure banking features at Merrill Edge is to open a checking or savings account at Bank of America. The account will be automatically linked to your Merrill trading account.

If you would prefer to skip the banking route, Merrill itself offers checks and debit card that can be attached to an investment account. Doing so doesn’t create a separate bank account, although free cash balances do have FDIC insurance. There is no charge for either the card or the checks, and Merrill reimburses ATM fees incurred at Bank of America locations. Making a transaction in a foreign currency with the debit card costs an extra 2%.

Comparison

Merrill Edge Comparison

TD Ameritrade charges $0 for stock and ETF trades. The broker offers much better software than Merrill has. Even better, TDA’s software comes with zero account minimums or trading requirements.

On the mutual fund side, it is quite easy to find a brokerage firm with a larger selection. Vanguard, USAA, WellsTrade, and Fidelity are a few examples. The same goes for no-load, no-transaction-fee funds. But some brokers don’t offer any mutual funds at all. These include Robinhood and M1 Finance. Firstrade offers over 10,000 mutual funds with $0 commission.

Schwab’s checking account comes with worldwide ATM fee rebates and charges a 0% forex surcharge. On the flipside, TradeStation offers no debit card at all.

Recommendations

With its customer service and educational materials, Merrill Edge would be a decent broker for beginners. Because the company has no minimum deposit requirement or low-balance fee, it would also be a good pick for small accounts.

We definitely do not recommend Merrill Edge for mutual fund investors. Its selection is just too small. For IRA’s and 401(k)’s, we also can’t endorse Merrill. It has too many fees that can be avoided at other brokerage firms.

For stock trading, Merrill would be a good pick for Bank of America customers who can score $0 commissions with access to the desktop platform.

As for ETF’s, Firstrade’s 2,500+ plus commission-free list is a better idea.

Merrill Edge Review Recap

Merrill Edge does a run-of-the-mill job providing low-cost investment services. In most categories, it’s pretty effortless to find another company that has a better service. But for Bank of America customers who can qualify for free trades, it may be a good value.



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Merrill Edge Commissions and Fees

InvestmentsPrice
Stocks and ETFs$2.95
Stocks and ETFs$0 if $20,000 in combined accounts balances
Stocks and ETFs representative assisted $29.95
Stocks and ETFs automated phone trades$2.95
Options $2.95* + $0.65 per contract. Multi-leg options are charged per leg and contract.
Options representative assisted$29.95* + $0.65 per contract. Multi-leg options are charged per leg and contract.
Options exercised/assigned$2.95*. Multi-leg options are charged per leg and contract.
Mutual funds $19.95
Merrill Edge self-directed mutual funds 0.75% gross proceeds, $50 minimum, $250 maximum
Bonds On a net yield basis
* -- Additional transaction fees In addition to your options commissions, sell orders may be subject a transaction fee (of between $0.01 to $0.03 per $1,000 of principal). If applicable, this fee appears under "Transaction Fee" on a Trade Confirmation.

Merrill Edge IRA & Account Fees

FeeAmount
IRA Setup Fee$0
Annual IRA Fee$0
IRA Termination Fee$49.95
Full Account Transfer Out$49.95
Partial Account Transfer Out$0
Outgoing Wire Fees (Domestic)$24.95
Outgoing Wire Fees (International)$24.95

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Merrill Edge reviewed by TopRatedFirms.com Rating: 3