Merrill Edge vs. Vanguard Introduction
If a bank account just doesn’t provide enough return on your capital, perhaps an investing account
could deliver a more fruitful experience. Vanguard and Merrill Edge both have such securities accounts
in several forms with a variety of services to supplement the accounts.
Comparison Table
|
|
|
| Rating |
|
|
| Stocks |
$0 |
$0 |
| Options (per contract) |
$0.65 |
$1.00 |
| Mutual Funds |
$19.95 |
$20.00 |
| Initial Funding Requirement |
$0 |
$0 |
| Inactivity Fee |
$0 |
$0 |
| IRA Annual Fee |
$20 |
$0 |
| Full Account Transfer |
$49.95 |
$0 |
| Partial Account Transfer |
$0 |
$0 |
| Account Closing Fee |
$0 |
$0 |
| Trading Experience & Technology |
|
|
| Mobile |
|
|
| Research Amenities |
|
|
| Portfolio & Analysis Reports |
|
|
| Customer Service and Education |
|
|
Available Products
Brokerage and investment-advisory accounts are available at both firms. On the self-directed side of things, there are stocks, options, funds (mutual, exchange-traded, and closed-end), and fixed-income vehicles. Merrill Edge has a larger OTC stock offering than Vanguard.
Vanguard has a robo service that uses a computer program to select Vanguard ETFs for an account. Merrill Edge uses actual human advisors to do this, although its program nevertheless remains a budget service. Merrill’s costs 0.45% annually, while Vanguard charges 0.25% or less.
Both firms have advisory programs where it’s possible to consult with a human investment advisor, get a financial plan, and generally find a lot more assistance than a budget program can offer. Fees vary, based on the exact setup chosen.
A wide range of taxable and tax-deferred account modes can be opened at either firm in this comparison. We’re talking education accounts, 529 plans, retirement accounts, solo 401k plans, joint accounts, custodial accounts, and more.
Winner: Because Merrill Edge has branch locations for advisory customers, we give it the victory here
Bank Products
Merrill Edge customers can attach debit cards and checks to their brokerage accounts. There are no recurring fees for doing so, although using the debit card overseas will come with surcharges. Because Merrill is owned by Bank of America, investing accounts are automatically linked to checking and savings accounts. It’s really easy to transfer funds between securities and deposit accounts online.
Vanguard has closed its cash-management service.
Winner: Merrill Edge
Margin
A margin account is needed to perform a variety of investing strategies. Neither broker-dealer in this
contest fails to offer it. Vanguard’s stepped margin schedule begins at 12.75%. and decreases to 9.5%. Merrill Edge has a tiered schedule that incorporates a customer’s total assets within the Bank of America family of companies. The potential margin schedule varies from 12.93% to 8.93%.
Winner: Pretty close
Websites
Both brokerage firms in this challenge have websites that can be used for security research, charting, and order entry. Advisory accounts can also be accessed and managed through the sites.
The Merrill Edge site a collection of advanced option tools. These valuable resources can be found under the Research tab. There is an actual screener for contracts, which is quite unusual in the brokerage world. And a strategy builder tool can find multi-leg plays based on a variety of inputs.
Then there is MarketPro, a sophisticated browser platform. It can be used to trade options, stocks, and ETFs. Charting is on a very high level with a full-screen mode and many tools.
Over at Vanguard, there is no web-browser platform at all. Instead, everything is done on the website, and it is a very simple site. Charts, for example, don’t expand the full width of the monitor, and we found fewer tools compared to what MarketPro offers.
Winner: Merrill Edge
Mobile Apps
Trading on a computer is so 20th century, and both securities brokers here know it. That’s why they have mobile apps. The Merrill platform boasts a lot of the same features we found on its very good website (minus MarketPro, of course). The trade ticket has 8 trade types, including:
Stop
Limit
Trailing ($ or %)
The Merrill app has discrete tickets for mutual funds and options. Charting can be accomplished in horizontal mode with a variety of tools, and options contracts can be charted, too.
For security research, there is quite a bit of information on stocks and funds. We found pdf reports from CFRA and Morningstar on many stocks.
On Vanguard’s app, we found trade recommendations on stocks from multiple analysts. But there are no stock reports. Charts are very simple. A graph cannot be displayed horizontally, and there are zero tools.
A recent update to the Vanguard app has added actual trading in stocks. However, there are only 4 order types. Perhaps the most disappointing aspect of the app is that it can only trade mutual funds from Vanguard. Mutual funds from other fund families can only be traded on the website.
Winner: Merrill Edge
Supplementary Services
Fully-Paid Stock Lending: Vanguard customers, but not Merrill Edge clients, can earn money by loaning out their fully-paid shares.
Individual Retirement Accounts: Both firms have IRAs and both firms charge IRA fees in certain situations.
Automatic Mutual Fund Investing: Available at both firms, although Vanguard limits its service to Vanguard funds only.
Fractional Shares: At Vanguard, it’s possible to buy Vanguard ETFs using whole-dollar amounts.
IPO Access: Not available at either investment firm.
Extended-hours Trading: Vanguard customers can trade after the closing bell. Merrill Edge clients can trade in this evening session plus a pre-market period.
Dividend Reinvestment Plan: A DRIP can be enabled at either brokerage house.
Winner: Draw
Recommendations
Beginners: We recommend an investment-advisory account at either firm. Both offer human advisors in various capacities, and adding one to an account for additional personalized help would be even better.
Mutual Fund Trading: Using Vanguard’s mutual fund screener, we found 7,052 funds. At Merrill Edge, we received 2,647 results on its fund screener. But Merrill Edge has a more user-friendly screener.
Small Accounts: Vanguard requires a steep $3,000 initial deposit to begin its robo program.
Merrill Edge only requires $1,000. Neither firm has any minimums or recurring fees for taxable self-directed accounts.
Long-Term Investors & Retirement Savers: An advisory account with a one-on-one working relationship
with a human financial advisor at either firm will work. Because Merrill has offices inside some Bank of America locations, we lean towards it.
Stock and ETF Trading: Definitely Merrill Edge with MarketPro.
Best Brokers
Merrill Edge vs Vanguard: Which is Better?
Both firms have strong and weak points. Advanced stock and option traders should definitely stick with
Active investors and traders as well as those new to investing should also take a look at our
Top 10 Stock Brokers.
Updated on 1/1/2025.
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