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: $0
  • Options: $0.65 per contract
  • Mutual Funds: $19.99
  • Minimum to open: $0

Overview of Merrill Edge

Bank of America offers more than just checking and savings accounts. Through its subsidiary Merrill Edge, the financial conglomerate provides a wide range of investing services. Let’s check them out.


Investment Selection

Merrill Edge Investments Rating

Merrill Edge clients can choose between two basic investment systems: self-directed and investment-advisory. The former setup will come with the larger list of tradable securities. These include:

  • Option contracts
  • Stocks (including over-the-counter and penny stocks)
  • Bonds and other fixed-income assets
  • Mutual funds
  • ETFs
  • Closed-end funds

The advisory service, officially called Guided Investing, provides account management from Merrill’s investment professionals, although it comes with a smaller list of securities: just mutual and exchange-traded funds. It’s not a robo program; investment decisions are made by actual human advisors. However, there is no working one-on-one relationship as there is in a full-service program.

To fill this hole, Merrill Edge offers Guided Investing with Advisor. As the name suggests, this one delivers that one-on-one relationship. It’s still not a full-service program, though. Many investment products and services traditionally found in such a program, such as financial planning and stock investing, are unavailable.

To open an account under either program, self-directed or investment-advisory, Merrill Edge requires a U.S. residential address. The company does not open accounts for non-U.S. residents, although it does open accounts for foreign nationals legally residing in the United States.

Merrill Edge offers a wide variety of tax structures for its investment accounts. These include:

  • 529 plans
  • Individual taxable
  • Joint taxable
  • IRA
  • Solo 401k plans
  • Custodial
  • Small business accounts
  • Trusts

Merrill Edge is a member of the Securities Investor Protection Corporation (SIPC), which delivers $500,000 of insurance on positions of securities. The investment firm also has a supplementary policy at Lloyd’s of London that comes with an extra billion dollars in coverage in the event SIPC coverage were ever exhausted.


Merrill Edge investing review


Customer Support

Merrill Edge Customer Rating

Under the Help & Settings tab on its website, Merrill Edge offers a lot of self-help resources. During our investigation, we found tools for paperless settings, account alerts, and login preferences. There is also a link to a forms page that has a very long list of documents that an account may need at some point. These are available in both pdf and online formats.

There is no chat widget on the Merrill site, either in robo or human format. There is also no internal messaging, although there is a document-upload tool.

For tasks that can’t be completed online, there is always phone service. Available 24/7, Merrill Edge agents have consistently provided us with competent service. There is a number for customers who are traveling outside the United States.

Although Merrill Edge does have some branch offices at some Bank of America locations, these do not provide any service on Guided Investing or self-directed accounts.


Fees and Minimums

Merrill Edge Fees Rating

The Guided Investing program requires a $1,000 deposit to get started ($20,000 for the advisor add-on). Self-directed accounts have no minimum deposit requirement.

Advisory accounts have no commissions on trades, and brokerage accounts have zero commissions for most online trades. Option trades do have a 65¢ per-contract fee. Some mutual funds have a $19.95 transaction fee, and some bond trades cost $1 per bond.

Brokerage accounts of course have no management fees of any kind. Advisory accounts cost 0.45% per annum (or 0.85% for Guided Investing with an Advisor).


Mobile App

Merrill Edge App Rating

The Merrill Edge mobile app has a watchlist that can toggle between a device-only list and the watchlist from the website. With either list, tapping on an entry produces the asset’s profile, where basic charting and trade buttons will be found.


Merrill Edge app review


Charts have various tools, like indicators, company events, and multiple plot styles. However, during our testing on an iPhone 6S, we experienced display problems. Order entry, however, was quite good with discrete tickets for options and mutual funds. The stock ticket has 8 trade types, half of which are trailing orders. There are discrete actions for buy to cover and sell short.

Merrill’s app has mobile check deposit, bill pay, Zelle transfers (for Bank of America accounts), and some good research tools, including pdf reports from CFRA. The same document upload tool we found on the website is also available on the app.


Website

Merrill Edge trading Rating

A much better trading experience will be found on Merrill Edge’s website. It is divided into two sections: MarketPro and the website proper. MarketPro is a browser platform that can be launched by clicking on the relevant link under the Trade tab.


Merrill Edge trading review


MarketPro has 6 trade types (2 trailing orders from the mobile app are missing), although this time an order can be saved for later use. MarketPro has very good full-screen charting with lots of gadgets and gizmos. Examples of drawing tools include:

- Down Gann Fan
- Fibonacci Extension
- Cycle Tool
- Andrew’s Pitchfork

A chart can be saved, and there are trade buttons in the upper-right corner. A right click of the mouse will generate a drop-down window with several choices. These include:

- Bar tracking
- Set up an alert
- Export data
- Trade
- Crosshair tracking

Level II quotes and OptionsPlay, an advanced derivative platform, also make appearances.

The website itself offers charting and order entry. Research tools are available for both equities and options. Some of the best option tools in the industry will be found on the Merrill site (look under the Research tab for a strategy builder and a screener).


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Cash Management

Merrill Edge Management Rating

Joint and individual taxable accounts at Merrill Edge officially carry the title Cash Management Account (CMA), which reflects the emphasis that the company is trying to place on available banking features. Check writing and a Visa debit card can be added to a CMA free of charge. Using the debit card overseas carries a 0.25% surcharge with a $2.50 minimum. Withdrawals at Bank of America machines have no fees.

Uninvested cash in a brokerage account can be swept into Bank of America, where it will earn FDIC insurance. It’s also possible to invest it in a money market mutual fund or leave it uninvested in the brokerage account where it will be protected by SIPC.

Investment accounts at Merrill Edge are automatically linked to deposit accounts and credit cards with Bank of America if they have the same tax ID number. It’s really easy to move money between these accounts on the Merrill website and mobile app.


Margin Accounts

Merrill Edge Account Rating

Cash trading is only the beginning at Merrill Edge. The broker-dealer offers margin trading for self-directed customers. A cash account can easily upgrade to margin status through the Help & Settings menu already discussed.

Margin rates at Merrill Edge are no longer published. They are determined by the base lending rate (which resets weekly), the total deposits within the Bank of America family, and the account’s debit balance.

Merrill’s software does not display margin details on entered ticker symbols, which we view as another weakness.

Merrill Edge follows Reg T requirements for margin loans, which means long and short equity positions will have a 50% initial margin requirement and a 30% maintenance requirement. These numbers can be stricter in some cases.


Additional Services

Merrill Edge Service Rating

Initial Public Offerings: Not available in either self-directed or managed accounts (MarketPro does have an IPO calendar, however).

Automatic Mutual Fund Investing: It’s possible to set up recurring purchases of mutual funds.

Individual Retirement Accounts: Merrill Edge has SEP, SIMPLE, Rollover, Roth, and Traditional accounts. There is a $49.95 closeout fee.

Fully-paid Securities Lending Program: Merrill Edge customers cannot earn income by loaning out their marginable securities.

Extended Hours: Trading is possible inside a Merrill Edge self-directed account from 7:00 am, Eastern Standard Time, until 8:00 pm.

DRIP Service: Cash dividends from stocks, ETFs, and mutual funds can be converted automatically into additional shares.

Fractional-share Trading: Only possible with mutual funds.


Our Recommendations

Active Stock Trading: MarketPro would be a good idea.

Mutual Funds: On the Merrill Edge website, we found 2,646 funds open to new investors. At Firstrade, there are more than 17,000. We would go with Firstrade.

Beginners: A managed account with Merrill Edge Guided Investing would be a good start (with a human advisor would be even better).

Retirement Planning & Long-Term Investing: Merrill Edge does have good resources for both advisory and brokerage customers. Retirement investors should open an account with Robinhood, who has a free 1% contribution match.

Small Accounts: Because of Merrill’s minimums for advisory accounts, we can’t defend it. Because of its IRA termination fees, we can’t defend it for any type of IRA, either. We suggest Charles Schwab instead.


Merrill Edge Review Recap

Although not without its weaknesses, Merrill Edge has a good overall investment program that is sure to please beginners and advanced traders alike.


Firstrade


Merrill Edge Commissions and Fees

InvestmentsPrice
Stocks and ETFs$0
Stocks and ETFs representative assisted $29.95
Stocks and ETFs automated phone trades$0
Options $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.
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