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Merrill Edge is a low-fee self-directed broker and a subsidiary of Merrill Lynch, one of the largest asset managers in the world.
Despite the name “Merrill Lynch” often associated with the rich and exclusive, Merrill’s brokerage arm is one of the cheapest in the industry. They have no account minimums, great research tools, and an exclusive partnership with Bank of America.
Read on to see if Merrill Edge is the right place for you to open a brokerage account in 2022.
Merrill Edge Overview
| Features: | Details |
|---|---|
| Account Minimum: | $0 minimum balance to open an account. |
| Commissions: | $0 on all Stock Trades, Options, & ETFs. $29.95 for broker assisted trades. |
| Account Types | Individual and Joint Taxable Accounts, Traditional and Roth IRAs, Robo-Advisor, Asset Management. |
| Automatic Rebalancing: | Yes, but only available for those who utilize Merrill's robo-advisor. |
| Customer Support: | 24/7 email, live chat, and phone support for customers. |
| Human Advisor(s): | Yes (but not free) |
| Mobile App: | Yes: iOS & Android |
| Tax Strategy: | No |
| Tradeable Securities: | Stocks, ETFs, Options, Bonds, and Fixed Income Assets. |
| SIPC Insured: | Yes |
| Socially Responsible: | Yes |
About Merrill Edge
Merrill Edge is the brokerage arm of Merrill Lynch, the goliath investment bank and now a subsidiary of Bank of America.
Bank of America customers who also have a Merrill Edge account can earn valuable rewards like discounts on mortgages and auto loans, increased cashback on VISA cards, free ATM withdrawals, and high-interest rates on cash balances.
All the main types of accounts can be opened here – taxable and non-taxable (retirement), and margin trading. And all these accounts have no annual account fees or minimum balance requirements.
Merrill Edge is one of the best online stock brokersdue to its technology, excellent research, and low costs. Above all, it’s a win-win for current Bank of America customers considering opening a brokerage account.
Pros:
- The tie-in with Bank of America makes for some nifty features. Like easier access to human, financial advisors, seamless account integration and transfers to and from Merrill Edge accounts.
- A broad spectrum of securities is available to trade.
- The educational resources and resource library are top-notch.
- Responsive, 24/7 customer service.
- $0 commissions on stocks, ETFs, and options trades.
Cons:
- Margin rates are on the high side, especially for smaller account sizes.
- The mobile app has some room for stability improvements.
Merrill Edge Account Details
Account Minimum Balance:
$0 minimum balance for all Individual and Joint brokerage accounts and all Individual Retirement Accounts (Traditional, Roth, SEP, SIMPLE, or Rollover).
Commissions:
$0 commissions on all stock trades, options trades, and exchange-traded funds (ETFs) made online or on the mobile app; $29.95 for broker-assisted trades placed over the phone.
Options contracts trade for $0 commission and a $0.65 per contract fee.
Merrill Edge charges $0 commissions or transaction fees for load-waived funds; funds identified as transaction fee attached will cost $19.95 per transaction online or $29.95 if done via a live broker.
Management Fee(s):
No management fees for standard brokerage account balances.
- Directed Investing (Robo-advisor) – 0.45% per year (can drop for Bank of America customers)
- Merrill Edge Directed Investing with Advisor – 0.85% per year (can drop for Bank of America customers)
Account Types:
- Individual and Joint Taxable Brokerage Accounts
- Margin Trading Accounts
- Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs Custodial IRAs, and Rollover IRAs
Bank of America customers can sync up their accounts, make transfers seamlessly, and enjoy a holistic view of their finances from one clean dashboard.
Automatic Rebalancing:
Not offered in standard brokerage accounts unless enrolled in a robo-advisor.
Expense Ratios:
Expense ratios on Merrill Edge’s $0 transaction fee, $0 load funds range from 0.05% to over 1% per year.
Customer Support:
Support for customers is available by phone 24/7, as well as live chat with specialists in both the mobile app and desktop trading platform. Merrill Financial Solutions advisors can be met with at Bank of America locations around the U.S.
Human Advisor(s):
Yes, human advisors available for broker-assisted trades, and a wealth of investment bank resources from Merrill Lynch are available to Merrill Edge clients.
Mobile App:
Merrill Edge has a mobile app on Android (3.7/5) and iOS (4.7/5). The app allows most trading functions and seamless banking integration with Bank of America. However, some Android users have complained about some uptime issues during the trading day.
Tax Strategy:
No automated tax harvesting strategy for standard brokerage account holders. Merrill Edge website has resources available to help with overall tax strategy, with articles and guides written by experienced fiduciary managers and updated with current tax information each season. Merrill Edge trade data can be integrated with TurboTax
Tradeable Securities:
All U.S.-exchange listed stocks, funds, options, and ETFs are available to trade. Most U.S.-listed mutual funds available can be traded online for no transaction fee; others will have fees ranging from $20-30 per transaction.
Over-The-Counter stocks (penny stocks) can be traded in the U.S., as well as fixed-income investments including Treasuries, Municipal & Corporate bonds, secondary market issues, and CDs.
Fractional shares cannot be purchased at Merrill Edge.
Socially Responsible Investing:
Merrill Edge has hundreds of funds & ETFs you can view in their search tool which focuses on environmental, social, and (corporate) governance, or ESG investing.
Merrill Edge Promotions:
New qualifying accounts (must deposit at least $25,000) can earn up to $600 cash if they open a new Merrill Edge account (assets can’t be coming from Bank of America or another Merrill Lynch account).
Margin Trading:
Margin trading is available on taxable Merrill Edge accounts. Customers must fill out a separate application form that includes disclosures relating to the additional risks involved with trading securities on margin.
The interest rate paid on margin (which is a loan from subsidiary National Financial Services to you) fluctuates based on market conditions such as the rate on near-term Treasury Bills, and on account balance.
Margin interest starts at 8.625% for balances under $25,000, and margin rates can go below 7.5% for balances over $100,000.
Traders looking to sell stocks or options contracts short must have a margin account opened at Merrill Edge, which includes extra levels of risk evaluation and a lengthier approval process than just opening a brokerage account online.
Asset Management:
Merrill Edge has extensive ties to client asset management stemming from decades as a top-tier investment bank.
Merril has been working with professional money managers as an account custodian and trading partner while offering separate account management for high-net-worth (HNW) individuals.
Furthermore, there is a robo-advisor program, Merrill Directed Investing. Clients can enroll in this program ($5,000 min) and can construct a passive portfolio with occasional rebalancing for life goals and budgetary needs.
Merrill Edge Review:
Merrill Edge has been around since 2010. However, their offerings and capabilities continue to grow as ties between Merrill Lynch and parent company Bank of America get stronger.
There are no base account fees, no minimums, and zero commissions on stock, ETF, and options trades – the necessary trifecta of any online broker.
They offer everything a self-directed investor needs at Merrill Edge to get up and running on their own. But if you need or want extra service or some one-time advice, specialists and representatives can be reached easily over the phone or in-person at hundreds of locations around the country.
Merrill Edge has many features and tools that cater to active traders such as advanced screening, real-time options chains, and real-time pricing on the mobile app.
The particularly strong research library is largely due to the Merrill Lynch Global Investment Insights group, who publishes world-class stock research, bond research, and commentary on macroeconomic forces.
From the top-down, Merrill Edge is a slam dunk choice for current Bank of America customers, but also a fine choice for most investors.
Merrill Edge is Best For:
- Beginner, intermediate, and experienced investors
- Bank of America Customers
- Those who want access to detailed research
Merrill Edge is a top online stock brokerfor beginner, intermediate, and experienced investors.
There’s enough hand-holding resources for people just starting out that are integrated into the web platform, and research tools for investors who want to do deep dives into specific companies or industries.
Cost and fee structure are in line with Merrill’s largest peers, so price won’t ever be an issue for someone considering opening an account here.
What is Merrill Edge?
Merrill Edge is a division of Merrill Lynch, Pierce, Fenner, and Smith Incorporated (MLPF&S), a U.S. broker-dealer and member of SIPC. Merrill Lynch is a subsidiary of Bank of America Corporation.
How Does Merrill Edge Work?
Merrill Edge Investments allows account holders to buy and sell multiple types of securities in taxable or retirement-based accounts, mostly for $0 commissions.
With no annual account service fees, no account minimums, and no inactivity fees, this discount broker is ready to help you start investing.
While Merrill Lynch is owned by Bank of America, account holders are not required to open a Bank of America account or run deposits through that particular bank.
Brokerage account holders at Merrill Edge can move money in and out of Bank of America checking accounts, or purchase stocks, funds, bonds, and other investments on the open market at zero commission with unlimited trading (no caps).
Since they do not charge any commissions for online trades, how does Merrill Edge make money as a brokerage? Here are some of the ways:
- Account transitioning fees – While most base fees are waived on Merrill Edge accounts, the wire transfer fees, ACAT fees, and account closure fees do add up for them.
- Interest on cash balances – Merrill Edge earns interest income on un-invested cash balances held at their brokerage and pays only part of that interest income back to customers via cash yields (though Merrill Edge’s default cash accounts pay an attractive high yield compared to peers).
- Interest on margin – customers who take out loans to buy stocks or other investments pays interest on those loans, earning fees for Merrill Edge.
Standout Features:
Their ties to a leading investment bank and consumer bank make Merrill Edge attractive to investors.
If you are a Bank of America customer and are considering opening a brokerage account, you should do it at Merrill Edge. The rewards you can earn by doing both add up fast.
Merrill Edge, does not earn fees from market makers that work for securities exchanges by selling order flow.
This helps ensure the best price is received for every trade and is a very pro-customer move by Merrill Edge. This level of commitment is hard to find on Wall Street.
Does Merrill Edge Offer Wealth Management?
Merrill Edge has two wealth management options, both fitting the robo-advisor and “hybrid” robo-advisor mold.
The base robo-advisor package is called Merrill Guided Investing and has a minimum balance of $5,000 to get started. The management fee is 0.45% per year. However, this can decrease if a customer signs on to Bank of America Preferred Rewards program.
An extended version of Merrill Guided Investing offers a dedicated professional who will discuss your investing goals and life priorities. They will structure your portfolio around that.
Merrill Guided Investing with an advisor allows you to have periodic visits with your pro. This service bumps the management fee up to 0.85% per year and requires at least $20,000 to invest.
Fees and Pricing:
Zero commissions on all U.S. stock, ETF, and option trades. There is a $0.65/contract service fee for options trades.
Zero account opening, or maintenance fees. An outgoing wire fee of $25. Account closing/transfer out (ACAT) fees of $49.95. Closing a retirement account incurs a $49.95 fee.
Merrill Edge family mutual funds trade for $0 commission; non-Merrill Edge, mutual fund trades, will cost up to $50 per transaction.
Furthermore, service fees are incurred on foreign-listed stocks, Unit Investment Trusts, Primary and Secondary offerings.
Is Merrill Edge Investments SIPC Insured?
Yes, all assets (securities + cash) held at Merrill Edge brokerage are Securities Investor Protection Corporation (SIPC) insured up to $500,000.
This $500,000 in protection applies to each account capacity (such as Individual, Joint, or Trust account). The limit for SIPC claims on uninvested balances is $250,000 cash.
Also, Merrill Edge has obtainedsyndicateinsurance from Lloyds’ of London that can amount to up to $1.9 million (per account) in additional coverage, the highest excess SIPC protection in the industry.
Merrill Edge’s Research Resources
Merrill Edge, has a robust library of resources, analysis on a wide range of global and national trends, and access to some of the smartest financial minds on the planet.
As a titan on Wall Street, Merrill Edge has strong data partnerships with companies like Morningstar and CFRA.
Merrill Edge investors have access to investment banking and asset management research reports. This normally cost thousands of dollars to obtain access to.
There is also a bevy of resources for each type of asset class and investable product Merrill Edge offers. And for beginners, there are detailed tutorials and training guides.
Bottom Line: Merrill Edge Review
Merrill Edge is a discount broker that caters to both beginner and experienced investors. Investors get access to steep deals, rewards, and access to some of the best research on Wall Street. Moreover, this broker is the perfect fit for Bank of America customers.
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