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Merrill Edge Guided Investing – Is it legit? | Review 2021

Merril Edge Guided Investing

6.8

Fees

4.0/10

Account minimum

5.0/10

Ease of use

8.0/10

Beginners

9.0/10

Advanced users

8.0/10

Pros

  • Portfolios are managed by humans
  • Excellent human advice
  • Change your goals anytime

Cons

  • High minimum requirements
  • High management fee
Disclosure: Please note that this article may contain affiliate links

Are you looking for a robust investing platform that provides research, guidance, and affordable fees?

Look no further than Merrill Edge, a product of Bank of America’s purchase of Merrill Lynch.

This advisory has multiple account options, investors looking for a hands-off approach enjoy the convenience Merrill Edge offers.

Merrill Edge brings together the brilliance of technology and human advisors, giving investors the best of all worlds.

While the fees aren’t the lowest in the industry, the benefits it comes with make up for the higher costs.

Read on to learn my thoughts in this Merrill Edge Guided Investing review and see how it stacks up.

What is Merrill Edge?

Merrill Edge offers guided investing in one of three ways:

  • Self-directed – Investors that want to invest their own way but with the guidance of professionals enjoy the self-directed account. There’s a $0 minimum investment and $0 stock, ETF, and option trades. You get insights in layman’s terms, and answers to your questions to help you make profitable decisions.
  • Merrill Guided Investing – If you’d rather have your portfolio built for you, choose Guided Investing. You’ll need a minimum of $5,000 invested but you’ll get tailored investment strategies based on your risk tolerance and goals. Your portfolio will consist of ETFs and mutual funds and be rebalanced as needed.
  • Merrill Guided Investing with an Advisor – If you want the advice of a personal (human) advisor in addition to everything offered in the online version, you’ll get it in this package. However, you need at least $20,000 invested.
Human Portfolio Management
Account Minimum
$5,000
Management Fee
0.45% or 0.85% for a dedicated human advisor ($20,000 Minimum)
Portfolio
ETFs, actively managed
Rebalancing
Tax Loss Harvesting
Fractional Shares
Automatic Deposits
Smart Beta
SRI
401(k) Assistance
Human Advice
Supported Accounts
Individual, Joint, Traditional and Roth IRA, Rollover IRA, SEP IRA
Best for
Investors who want actively managed portfolios and a hands-off approach. This is definetely a choice to consider if you already have an account with Bank of America or Merril Edge.
Summary
The fees are higher than most other robo advisors. However Merril Edge uses human portfolio management which would explain the higher cost.
Human Portfolio Management
Account Minimum
$5,000
Management Fee
0.45% or 0.85% for a dedicated human advisor ($20,000 Minimum)
Portfolio
ETFs, actively managed
Rebalancing
Tax Loss Harvesting
Fractional Shares
Automatic Deposits
Smart Beta
SRI
401(k) Assistance
Human Advice
Supported Accounts
Individual, Joint, Traditional and Roth IRA, Rollover IRA, SEP IRA
Best for
Investors who want actively managed portfolios and a hands-off approach. This is definetely a choice to consider if you already have an account with Bank of America or Merril Edge.
Summary
The fees are higher than most other robo advisors. However Merril Edge uses human portfolio management which would explain the higher cost.

How does it work?

Account opening

Choose the account option that suits your needs, whether you want self-directed investments or guided investing. You must meet the minimum investment requirements, as I spoke about above, with $5,000 the minimum for guided investments.

Merrill Edge has a similar application process as many other robo-advisors. After you enter your personal information, you’ll answer questions about your intention for the investment account, your goals, and risk tolerance.

Deposit and withdrawal

Merrill Edge has the unique benefit of a direct relationship with Bank of America, which is why it’s so great for Bank of America customers. All transfers, whether deposits or withdrawals are immediately posted. If you transfer your funds from an external account (another bank account), clearing your account may take a few days.

Bank of America customers can set up regular automatic deposits or send one-time deposits as needed. You can also transfer assets, using the asset transfer tool.

Interface

Merrill Edge’s interface is easy to use for beginners and experts alike. It’s clean and user-friendly, making it easy to screen for specific assets and it’s easy to understand how to make trades and/or make changes to your account.

The platform is easy to use whether you trade right on the website or you open MarketPro, the advanced trading platform which is available to everyone. You can’t customize your options on the website itself, but you can customize MarketPro.

Merrill Edge clients can set up a taxable or retirement account, both single and jointly owned.

What can you trade?

Merrill Edge clients can trade stocks, options, ETFs, and mutual funds. Choose from a variety of portfolios including socially responsible and governance portfolios.

Costs

As I stated above the Merrill Edge Self-Directed accounts are free. There’s no management fee and no commissions on most stocks and ETFs. Guided Investing incurs fees including:

  • Merrill Guided Investing – 0.45 percent of assets under management annually, however, Bank of America Preferred Rewards members get a discounted fee, as low as 0.30 percent.
  • Merrill Guided Investing with an Advisor – 0.85 percent of assets under management annually, however, Bank of America Preferred Rewards members get a discounted fee as low as 0.70 percent.

Other fees include:

  • No commissions for online stock and ETF trades
  • Options have a $0.65 per contract fee per leg
  • Mutual fund commissions are $19.95
  • Wire fees are $24.95
  • Closing an account is $49.95 for a full transfer and free for a partial transfer
  • Using a live broker costs $29.95 per trade

The fees aren’t the lowest, but there’s a good reason. If you compare the fees to the fees standard in-person brokerage firms charge, you’d see the value and the savings.

Additional features

  • Cash account – You can earn interest on your idle cash in either a regular bank account or a money market account. Merrill Edge sweeps the money into your designated account and pays interest on the funds. If you don’t opt to have the cash swept into either account, you’ll earn a base 0.05 percent in interest.
  • Human advisors – Merrill Edge offers human advisors for you to talk to, but if they execute trades for you, there’s an extra fee. As an added bonus, if you live near a Bank of America branch, you may walk in and get support from a representative there. These professionals usually help with life stage planning, such as retirement, but they are there if you need them.
  • Customer service – Customer service is available 24/7 for Merrill Edge customers on the phone and online. They also have a robust FAQ section where you can find answers to previously asked questions.
  • Research – Merrill Edge has robust research options including third-party research, all of which is offered free of charge. Some of the research options include a stock screener, ETF screener, mutual fund, and options screener. As far as the third-party research, it goes back at least six months to give you historical data on particular equities. They also offer robust charting capabilities.
  • Education – Merrill Edge also shines in the education department. They have educational materials for beginner, intermediate, and advanced investors. You can select your choices by topic or format including videos, articles, and webinars. They have calculators and tools and even a Morningstar Classroom that provides courses to help you understand your investment options, plan for retirement and so much more.

Video

Merril Edge Guide Investing Pros and Cons

PROs
You can get in person advice - at one of the branches. Of course you can also talk to human advisors on the phone
CONs
You need at least $5,000 to open an account
A human manages your portfolio rather than a computer - Combining the best of both worlds (robo-advisor and human advisor)
You can’t make changes to the portfolio - only to your goals
Change the goals in your portfolio - A change of heart? change your goals as often as you want
The annual management fee is high - High compared to other beginner robo-advisors
PROs
You can get in person advice - at one of the branches. Of course you can also talk to human advisors on the phone
A human manages your portfolio rather than a computer - Combining the best of both worlds (robo-advisor and human advisor)
Change the goals in your portfolio - A change of heart? change your goals as often as you want
CONs
You need at least $5,000 to open an account
You can’t make changes to the portfolio - only to your goals
The annual management fee is high - High compared to other beginner robo-advisors

FAQ

Is Merrill Edge only for Bank of America clients?

No, anyone can use Merrill Edge whether or not they have a Bank of America account, but there are many benefits if you are a Bank of America customer. First, you have all of your accounts in one place. With one log in you can see your banking and investments. Second, Bank of America Preferred Rewards members get significant discounts on the management fees for the robo-advisor.

Does Merrill Edge trade penny stocks?

No, Merrill Edge doesn’t trade stocks valued at less than $5 per share. They also don’t trade stocks that have little information available or are valued at less than $300 million. In short, they don’t offer penny stock trading.

Can you perform the same functions on the Merrill Edge app?

The Merrill Edge app is very versatile and provides many of the same functions you’ll get online. You can check your investments and do your research, however, charting is a bit hard to decipher on the app, so you may want to reserve it for the web platform only.

Do active traders do well with Merrill Edge?

While Merrill Edge is a robo-advisor that offers mostly hands-off investing, they do offer the use of the MarketPro technology that’s great for active investors. With robust charts, alerts, and real-time quotes, active investors have the information need to make quality trades. Alternative robo advisors for investors who are looking to actively trade are RobinHood and M1 Finance, find out which we think is better.

Does Merrill Edge offer platform customization?

Looking at the same dashboard and information isn’t always ideal for investors. Some investors are particular about the information they see, especially active investors that need to make split-second decisions. Merrill Edge focuses on personalization, allowing investors to get the information they need the way they want it. While it’s not perfect, it’s more user friendly than other platforms.

What is the Merrill Edge Portfolio Story?

The Portfolio Story gives investors a robust view of their portfolio and how it functions. Investors can compare it to those on the market and can see a detailed breakdown of their portfolio, its allocation, and get detailed information that may prompt asset allocation changes or even investment changes. It’s a more diverse look into the portfolio than a dashboard could provide.

Is Merrill Edge good for beginners?

I like to think Merrill Edge is great for beginners not only because of its affordable fees and robust research, but also its 24/7 customer service. It’s unusual to get around-the-clock support, especially when working with a robo-advisor. You’ll get the hand-holding you need while making brave and important investment choices to plan for your future.

Alternatives

Merrill Edge vs TD Ameritrade

TD Ameritrade is great for active investors looking to save on fees. With $0 on stocks, options, and ETFs, investors can save quite a bit of money. TD Ameritrade doesn’t have an account minimum and offers free research.

Investors can trade a wide range of investments including stocks, bonds, ETFs, mutual funds, options, and futures, and is a great platform for both beginning and intermediate investors. If you aren’t a Bank of America customer, TD Ameritrade is a good alternative.

Merrill Edge vs Betterment

logo of bettermentBetterment is a robo-advisor that’s great for beginners. Betterment Digital is their flagship program.

It costs 0.25 percent of assets under management and is great for investors with little money to invest and/or those looking for retirement investments. Betterment has a $0 minimum balance requirement and invests in ETFs from 12 different asset classes. Betterment even offers socially responsible investment options.

Merrill Edge vs Robinhood

Robinhood also offers commission-free trades, and in fact, was one of the first robo-advisors to offer it. Most have followed, but Robinhood is great for investors looking to trade not only ETFs but stocks and options too. Some investors may also be eligible for the cryptocurrency beta. Robinhood doesn’t require a minimum amount invested, but they only have taxable accounts – you can’t start a retirement account. We do love that they buy fractional shares, though, allowing you to invest in just about any stock.

Merrill Edge vs Fidelity Go

Do you want the best of both worlds between an automated advisor and a human advisor? Fidelity Go offers this. You get their robust technological platform with humans overseeing your account.

The human advisors reallocate your balance as necessary but you don’t talk to the financial advisors like you would with a standard brokerage. They are just the human touch to your account but still provide you with the hands-off approach to investing traditional robo-advisors offer. Fidelity Go is also free until you have $10,000 of assets under management.

Current Promotions

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Worth It or a Scam?

Merrill Edge is a trustworthy company with the backing of one of America’s largest banks – Bank of America. To top it off, they go to great lengths to take proper security measures using bank-level security to keep your information safe.

If you’re a Bank of America customer, it makes sense to have everything in one place. Since Merrill Edge has such great reviews and offers such robust tools, it just makes sense. If you aren’t a BofA customer and you don’t need the benefit of a human advisor to talk to, you may want to look elsewhere, although Merrill Edge is definitely legit.

Summary

Explore all your options when looking for a robo-advisor. If you’re a hands-off investor looking for a quality broker with a household name, you’ve found it with Merrill Edge.

If paying slightly higher fees for the reassurance of having a human to talk to and run your ideas past is worth it, then you’ll love Merrill Edge.

I encourage you to compare fees and programs to see what others offer, but you’ll likely find that Merrill Edge is a hot contender.

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