Merrill Edge Review

No brokerage is perfect for everyone, but every brokerage designs their service line-up in such a way as to attract a certain type of customer. We think Merrill Edge stands out from the pack with these three main features:

1. $0 trades: Merrill Edge now includes $0 trades.
2. Fee-free debit card and bill pay: Being able to access your account balance at any Bank of America ATM without paying a debit or ATM fee is a major advantage for those who live near a Bank of America branch. Likewise, free bill pay makes it easy to pay bills straight from your account balance.
3. In-person customer support: Many Bank of America financial centers (branches) have Merrill Edge advisors available during normal banking hours for help with your account. If being able to speak to someone in branch is valuable to you, this can be a major selling point on its own.

This discount brokerage is toward the higher-end of the spectrum for standard commission prices, but no-transaction-fee funds and special deals for high-balance accounts make it an attractive bargain. Base commission prices are detailed in the table below.

Investors who want to invest in mutual funds will find many free trader choices on par with other large brokerage firms. As for mutual funds, Merrill Edge offers thousands of no-transaction-fee (NTF) mutual funds, though many may carry up-front or back-end loads (fees as a percentage of the amount invested.) That said, many funds that traditionally carry loads are load-waived on the Merrill Edge platform.

Costs aren't just limited to commissions. We read through Merrill Edge's fee disclosures, and found a few notable fees worth discussing in more detail.

• $39.95 early redemption fee for no-transaction-fee funds: Merrill Edge offers thousands of no-transaction-fee (NTF) mutual funds, but be aware that redeeming your investment within 90 days will result in a short-term redemption fee of $39.95. This is a common fee in the industry, as brokers discourage active trading of commission-free ETFs and no-transaction-fee mutual funds, which are designed for long-term buy-and-hold investors.
• $0 ATM charges: Visa debit cards are free with a Merrill Edge account, and you can make transactions at any Bank of America ATM for free. Given other brokers charge a fee just to have a debit card, and an ATM fee every time you use it, this is a valuable benefit of using Merrill Edge.
• Free checks and bill pay: Being part of Bank of America has its advantages, as Merrill Edge customers get free checkbooks and online bill pay, which may make it an ideal solution for retirees who are taking distributions from their retirement accounts to cover living expenses in retirement.

This brokerage, like many, uses a purely web browser and mobile app-based platform. Investors who keep a $50,000 balance, make at least 15 trades per quarter, or qualify for free trades thanks to its loyalty program, qualify for Merrill Edge MarketPro®, which is a more sophisticated trading platform

Its highly-rated mobile apps are available for any customer on iOS, Android, and Windows devices, so virtually any smartphone, tablet, or other mobile device has an app-based solution for making trades on the go. Best of all, the mobile app offers all the functionality you would expect of a desktop solution -- streaming data, multi-leg (complex) options, and mutual fund trading.

This brokerage may not be the best fit for investors who use margin as an integral part of their investment strategy. That's because its margin rates are on the higher-end of the discount brokerage industry, even for clients who have large balances ($1 million or more).

Of course, margin rates are irrelevant if you do not plan to use margin to leverage your portfolio. Investors who use a cash account can simply forget margin exists. Investors who use large amounts of margin for long periods of time to leverage their portfolio will likely want to look elsewhere, however, given the high cost of carrying a debit balance.

One major advantage of using a brokerage that is tied in with one of the nation's largest banks is customer service and support. Clients can get help at thousands of Bank of America financial centers (branches) where there are Merrill Edge advisors on staff to help you with anything related to your account. For convenience, you can also schedule a meeting with a local representative so as to get in and out as fast as possible, without waiting in line.

Merrill Edge also offers help 24/7 over the phone. An online chat service is available from 7 a.m. to 11 p.m. ET, Monday through Friday, and from 7:30 a.m. ET to 6 p.m. ET on Saturdays. (We used its online chat service to ask about its operating hours, and received an answer within 30 seconds.)

Discount brokers are offering more research and other tools to help bridge the gap between barebones discount brokerages and traditional full-service brokerage firms. Merrill Edge has a few noteworthy research capabilities available to its clients:

• Bank of America/Merrill Lynch equity research: One key advantage to this brokerage is that customers get access to BofA/Merrill Lynch equity research, which covers more than 1,300 stocks on U.S. markets.
• Morningstar & Lipper: Merrill Edge's online platform quickly shows fund data pulled from Morningstar and Lipper, showing a fund's Lipper rating in its category, and a Morningstar rating and style box for its investment mix.
• Stock Story: Merrill Edge customers can click to see a stock's “story,” in which it explains what the company is, how it makes money, how the stock has performed, and what analysts are saying about the company. This feature also uses MSCI's ESG ratings, which quantifies how a stock ranks for environmental, social, and governance factors.

Taking into consideration its pros and cons, we think a Merrill Edge account would be a good fit for you if the following statements apply to you:

• You can make the most of the free stock and ETF trades. This is a valuable perk that helps keep more money in your pocket.
• You trade options occasionally, but not heavily. Merrill Edge isn't the best pick for options traders, since the per-contract commission is slightly higher than what you'd be charged for the lowest cost brokers. That said, options trades are free and the per-contract fee is competitive.
• You value customer support. Merrill Edge is one of the few discount brokers that has a large branch network in virtually every single major metropolitan area. If there's a Bank of America office near you, help is just a short drive away.