Owned by Bank of America, Merrill Edge is one of the top firms in the investment space, offering state-of-the-art research resources and wealth management facilities to its clients, both individual and corporate investors.
It is a part of Bank of America’s retail banking division and combines the expert capabilities of both Bank of America and Merrill Lynch, bringing its A-game to the forefront. It deals with all financial securities including mutual funds, ETFs, stocks, fixed income, short-term bonds and options.
Merrill Edge offers its investors the investment insights of Merrill Lynch and the seamless banking facilities of Bank of America, ensuring a smooth and streamlined experience.
It has a dedicated focus on customer service, evident by the fact that its contact centers have been recognized by J.D. Power consecutively for 7 years for providing “An Outstanding Customer Service Experience” for its live phone channel.
As an independent entity, Merrill Edge isn’t as old as some of its closest competitors. Bank of America and Merrill Lynch launched Merrill Edge in 2010 to make investing simpler and more accessible to individual investors and to take head on the likes of Charles Schwab and Fidelity Investments in the online brokerage space.
Merrill Edge grew at a fast pace, launching its mobile app just after a year of its existence and bagging the recognition by J.D. Power for providing “An Outstanding Customer Service Experience” for its phone channel for the first time.
As a child of Bank of America and Merrill Lynch, Merrill Edge already had $118 billion in 2 million customers’ investable assets, with a considerable portion coming from BoA’s customer base and Merrill Lynch’s referrals.
Notwithstanding the growth, Bank of America extensively marketed Merrill Edge through its own channels, including ATMs, physical branches and ran dedicated kiosks for information.
From 2011 to 2014, Merrill Edge launched advanced and exclusive trading platforms and product offerings for investors, including its mobile application, Merrill Edge MarketPro, Merrill Edge Select® Portfolios, Merrill Edge Roadmap, Face Retirement campaign, among others, granting its investors a lot more avenues to get insights and information and the ability to track and manage their portfolio.
Types of Accounts
Merrill Edge provides its investors with several options for investing and trading. Individuals can opt for a self-directed online brokerage account or go for the guided investing option as well with managed portfolios.
Online Brokerage Account
Merrill Edge online brokerage account offers a diverse set of funds to choose from among stocks, bonds, ETFs, mutual funds and options. Let’s take a look at the account details.
- Access to a range of choices of funds.
- Freedom to manage your account at all times through the mobile platform.
- Facility of a visa debit card and an unlimited number of checks.
- Easy transfers between a Bank of America bank account and a Merrill Edge trading account.
- An option to choose from Merrill Edge Pre-Selected funds, pre-evaluated by the firm’s advisors.
Minimum Deposit and Fees
- A flat stock trading fee of $6.95.
- No annual account fee.
- Zero minimum account deposit while opening.
For investors who are looking to lower their tax deductions, a traditional IRA with Merrill Edge might be the way to go.
- Invest in a wide range of stocks, ETFs, mutual funds, options and bonds, or choose from pre-screened funds by Merrill Edge professionals.
- Tax-deductible deposits and the balance is tax-deferred.
- Increase in contribution limit beyond 50 years of age.
Deposit and Fees
- No minimum balance required.
- Up to $5,500 can be invested until 50 years of age.
- An additional contribution of $1,000 per year post 50 years.
- A flat $6.95 trading fees on all stocks and ETFs.
When you look at the top brokerage firms in the industry, you’ll find that on the outside most of them offer more or less a similar platter of investment choices.
When you dig deeper and find concrete distinctions in facilities, deposits, commission charges, a number of commission-free ETFs or even the user-friendliness of their online trading platforms. Let’s check out some of the leading brokerage firms and their USPs.
Based in Pennsylvania, Vanguard ranks the second in offering the most number of exchange-traded funds. It offers its own mutual funds as well as non-Vanguard funds and you can manage all of these via your Vanguard Account. It charges commissions in the range of $2 to $20, depending on your trading status.
- One of the lowest expense ratios of mutual funds.
- Freedom to manage stocks of other companies through Vanguard account itself.
- No flat commission charge.
- Commission-free ETFs owned by Vanguard.
- Primarily caters to large volume traders.
- Minimum account threshold of $1,000 for some retirement accounts while other Vanguard funds carry a minimum deposit of $3,000.
Headquartered in the Omaha, Nebraska, TD Ameritrade is one of the most recognized names in the brokerage industry, offering par excellence service to both beginners and experienced investors. Its clients have access to 3 different web portals and 2 mobile apps, focusing on separate target audiences.
The stock trading fee for TD Ameritrade is a flat $6.95, with an options contract fee of $0.75.
- No minimum deposit on any accounts.
- More than 4000 no-transaction-fee mutual funds.
- Thinkorswim, its online trading platform, is exceedingly advanced and user friendly.
- Round-the-clock, well-acclaimed customer service.
- A high flat stock trading commission of $6.95.
- High short-term trading fees of $19.99 on holding the commission-free ETFs for more than 30 days.
Based in San Francisco, California, Charles Schwab is a renowned brokerage firm offering a wide assortment of ETFs, stocks, options, bonds and mutual funds. Charles Schwab charges a flat stock trading fee of $4.95 and options per contract fee of $0.65.
- Accounts don’t require a minimum deposit.
- A flat stock trading fee of $4.95.
- Over 4,000 no-transaction-fee mutual funds.
- A premium resource center accessible to all investors.
- A very steep fee of $76 for buying no-transaction-fee funds.
- The online portal, StreetSmart, ranks low on its ease-of-access and navigation.
Merrill Edge: Pros
Merrill Edge has a foundation that’s second to none, with the combined resources of Bank of America and Merrill Lynch. However, as an online brokerage firm competing with the best in the industry, what are the factors make it distinguished? Let’s take a look.
- Merrill Edge clients have access to the long-standing expertise of Bank of America, and they can easily get a load of information from its numerous branches across the country.
- Bank of America account holders can easily merge their investment account with Merrill Edge brokerage account.
- Choice of investing in over 3,290 no-transaction-fee mutual funds.
- An excellent research and data resource center, including webinars and videos, available for free for all investors.
- Robust customer service, available for client 24*7.
- The advanced trading platform, MarketPro, is available for large volume investors for deeper insights.
- Penny stocks (under $1) have no surcharge.
- 30 commission-free trades for investors with more than $25,000 balance in their account.
Merrill Edge: Cons
Despite the backing of giants like Bank of America and Merrill Lynch, there are some downsides to the firm that might dissuade a low-volume individual investor as well as an experienced trader to transact with Merrill Edge.
- No commission-free ETFs; this could be a deal breaker for a lot of small budget individual investors.
- The advanced trading platform, Merrill Edge MarketPro, is only available to traders with a high combined account balance of $50,000.
- Lack of some basic functionalities in MarketPro, like no one-click trading.
- The normal trading platform that’s available for all investors is also not very seamless and user-friendly owing to it being a browser-based portal.
- No forex trading.
Merrill Edge Review Bottom Line
Considering the overall pricing, investment strategies, and the platform capabilities, Merrill Edge is more suitable for high-volume investors, who are looking to transact in the range of over $25,000. You’ll get a premium quality research center along with a specific number of commission-free trades as well.
Also, investors looking to trade in penny stocks would definitely stand to benefit from the no-surcharge offer on penny stocks under $1.
Bottom line is, if you are already a Bank of America account holder, linking a brokerage account with Merrill Edge will be a cakewalk and definitely the most viable option. Seasoned traders prone to high technology trading platforms might have second thoughts, but the information and research provided by Merrill Edge beat a lot of its competitors.