Merrill Edge versus Fidelity Investments - IRA, compare commissions, investing fees, trading tools, account pros and cons. Which online broker is better?


Overview of Fidelity and Merrill Edge

If you’re thinking about opening a new brokerage account, you really should consider Fidelity Investments and Merrill Edge. While Merrill is the smaller and less well-known of the two, it is competitive in many areas. This article will give you a better idea of what services the two offer, and at the end, we’ll give you our recommendations.


Broker Fees

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Fidelity $4.95 $49.95 $4.95 + $0.65 per contract $0 $0
Merrill Edge $6.95 $19.99 $6.95 + $0.75 per contract $0 $0


Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Fidelity
Merrill Edge


Which Broker Has the Top Customer Service?

Both Fidelity and Merrill Edge have representatives on the phone 24 hours day, 7 days a week, 365 days a year. During test calls, we received competent service from both firms. Fidelity’s website has a larger selection of phone numbers for a variety of departments, such as charitable planning and managed accounts.

Both companies also provide online chat services on their websites. This customer service channel will be helpful to many customers. Neither broker offers it around the clock, however.

Fidelity also has a robo chat service (it hasn’t yet received a name like Alexa or Cortana). During some testing of it, we found it to be moderately helpful. Merrill hasn’t developed any such technology, but given the direction the world is moving, it’s probably inevitable in the future.

As for brick-and-mortar locations, Fidelity comes through with approximately 190 offices. Because Merrill Edge is owned by Bank of America, you might think the broker would have some branches; but the few that exist are only for investment-advisory clients.


What Banking Features Are Available?

Merrill’s affiliation with Bank of America doesn’t give it the best cash management tools in the brokerage industry, either. Checks and a debit card can be attached to an existing securities account at no charge. Several sweep options are available, including FDIC insurance up to $250,000. ATM withdrawals at Bank of America locations are free.

Fidelity customers get up to $1,250,000 of protection thanks to the broker’s FDIC-sweep program that moves uninvested cash to a maximum of five participating banks. Moreover, its debit card can be used at any ATM in the United States without any fees. Even better, there’s no limit to this fantastic policy.


What Account Types and Investment Vehicles Do the Two Firms Offer?

Merrill Edge customers can buy and sell fixed-income securities (including CD’s), exchange-traded and closed-end funds, stocks, options, and mutual funds. These instruments can be traded inside taxable and non-taxable accounts. We found custodial versions, 529 college savings products, annuities, self-employed 401(k) plans, and Individual Retirement Accounts.

Fidelity clients have the same range of investment vehicles. The company also provides access to life insurance products, one of the few brokerage firms to do so. As for accounts, the company offers the same as Merrill plus estate and trust accounts.


Who Has the Best Trading Tools?

We were very impressed with Merrill Edge’s website. It is easy to use and offers a lot of great features. A drop-down box appears after entering a ticker symbol in the search field (appearing at the top of the site). This box offers helpful data, a small chart, and a trade button.

At the bottom of the site is Merrill’s trade bar. Called TradeBar for obvious reasons, it is able to send orders for equities and options. It can display a small graph above the bar. The bar can be hidden, and there are settings where it can be turned off altogether.


Merrill Edge


If you want to bypass the website completely, the broker-dealer offers a desktop platform (for active traders) that includes watchlists, sophisticated derivate tools, and much more. One feature missing is direct-access routing.

Fidelity’s website isn’t quite as good as Merrill’s. It’s more difficult to navigate, and the Fidelity trade ticket doesn’t sit at the bottom of the browser. You have to click on a trade button to generate a pop-up ticket. Merrill’s setup seems better to us.

One area where Fidelity’s website outperforms Merrill’s is in the charting arena. A graph on Fidelity’s site can be displayed the width of the monitor, which is not possible on Merrill’s site. There are also more drawing tools with Fidelity’s charting program.

Active Trader Pro is Fidelity’s desktop program. The company doesn’t restrict it to frequent traders, which is a huge advantage right off the bat. The software also offers direct-access routing, another strength.


Active Trader Pro


And What About Mobile Trading?

Merrill’s app offers Touch ID, which made it easy to log in. Once inside, we found bill pay, mobile check deposit, and funds transfer. There’s even a free service that will give you your current FICO score.


Merrill Edge vs Fidelity


As for the order ticket, it provides several order types, but no other advanced functions (other than extended-hours trading). Charting is quite advanced for a mobile device, with multiple graph styles, company events, and technical indicators.

Fidelity’s app also offers Touch ID, but not a FICO score. Charting on the platform is comparable to Merrill’s app, and the trade ticket offers similar features. Options and mutual funds can be traded on both apps. One strength Fidelity has over Merrill in this category is free streaming of Bloomberg Business news in HD free of charge.


Fidelity App


Who Has the Most Mutual Funds?

Using the mutual fund screener on Fidelity’s website, we found 10,536 securities that were available for purchase. Approximately 1,800 have zero load and zero transaction fee. We don’t know the exact number because Fidelity’s screener can’t look explicitly for no-load funds.

At Merrill, we found 3,141 funds that were open to new investments. As for no-load, no-transaction-fee funds, the broker offers just 754 of them.

As for mutual fund resources, we really like Merrill Edge’s list of Select Funds. These are mutual funds chosen by Merrill Edge advisors for their expected bullish future. There is no charge for access to the list.

Exchange-traded funds are available at each broker, and we really like Fidelity’s collection of 265 commission-free funds. Merrill has zero.


Does Either Broker Offer a Robo Advisor?

Fidelity customers who, for one reason or another, are ready to give up trading on their own can pay 0.35% annually for a computer program that will buy and sell low-cost ETF’s. This automated service comes with a $5,000 minimum investment. Several traditional packages are available for higher fees and minimums.

Merrill Edge doesn’t have a robo advisor, but it does offer a low-cost human-managed service that costs just 0.45%, a great deal if you want a traditional service rather than a software program.


Promotions

Merrill Edge: Get up to $600 when you open new Merrill Edge account with at least $20,000.

Fidelity: Get 500 free trades with $100,000+ deposit.



Our Recommendations

For new traders, we’re going to recommend Fidelity over its competitor. We like its educational section slightly better than Merrill’s. There are more material types (infographics are available at Fidelity but not at Merrill, for example). With a large branch network, new traders could visit a location for an in-person seminar, something that’s not available to Merrill clients. We found seminars on tax-efficient investing and income diversification, for example.

Infrequent stock traders should go with Fidelity. Its desktop platform has no account minimums or trading requirements. Active traders who want to direct orders to specific markets should also go with Fidelity.

Retirement savers who are interested in opening an IRA will do well with either company.

Merrill would be a good choice for Bank of America customers who have at least $50,000 in combined bank and brokerage balances.

Bargain seekers should take a look at Firstrade Review.


Fidelity vs Merrill Edge Summary

Fidelity and Merrill Edge offer many different types of services that will appeal to a wide range of investors. Despite Merrill’s strong showing in many categories, it doesn’t quite seem to measure up to Fidelity. Merrill would probably be worth it if you qualify for free trades based on Merrill Lynch, Bank of America, and Merrill Edge balances.


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