Merrill Edge Review

As one of the fastest-growing brokerage services, Merrill Edge clients kept more than $177 billion of their wealth invested through the service at the end of 2017. In recent years, Bank of America has invested heavily in Merrill Edge, redesigning its mobile app and adding favorite features like Merrill Edge Stock Story to help investors quickly learn the basics about popular stocks on the market today. That investment has paid off, with Merrill Edge earning a spot on our coveted best online stock brokers for 2018 list.

Thanks to promotions for people who have large account balances, it is often the least-expensive broker for people who have a relationship with Bank of America.

Higher-than-average base commissions aren’t a dealbreaker, though. There’s a good reason why so many people choose Merrill Edge -- free trades. Customers who have an average combined balance of $50,000 or $100,000 in certain Bank of America and Merrill Edge or Merrill Lynch accounts qualify for 30 or 100 free stock and ETF trades each month.

• 30 free stock and ETF trades per month -- Requires reaching the Preferred Rewards Platinum tier. You can reach the Preferred Rewards Platinum tier by having eligible Bank of America personal checking account and maintaining a three-month average combined balance in your qualified Bank of America deposit accounts and/or qualifying Merrill Edge and Merrill Lynch investment accounts of at least $50,000.
  

• 100 free stock and ETF trades per month -- Requires reaching the Preferred Rewards Platinum Honors client tier. You can reach the Preferred Rewards Platinum Honors tier by having eligible Bank of America personal checking account and maintaining a three-month average combined balance in your qualified Bank of America deposit accounts and/or qualifying Merrill Edge and Merrill Lynch investment accounts of at least $100,000.

If you qualify for Merrill Edge Preferred Rewards, opening an account to trade stocks and ETFs may be a no-brainer, as your trading costs will round to zero on the first 30 or 100 trades per month (there are certain transaction fees related to selling investments that range from $0.01 to $0.03 per $1,000 of principal).

Investors who do not want to manage their own investments can turn it all over to Merrill Edge Guided Investing, paying a fee of 0.45% to have their assets professionally managed. The service allocates investments to exchange-traded funds based on the client’s needs, and you can start with as little as $5,000.

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

• $39.95 fee for no-transaction-fee funds -- Merrill Edge offers more than 3,300 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.

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.
  

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. 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 an Bank of America ATM. Likewise, free bill pay makes it easy to pay bills straight from your account balance.
   

2. 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.
   

3. Free trades for large balances -- Investors who keep a large combined balance in a qualifying Bank of America and Merrill Edge/Merrill Lynch account could realistically trade stocks and ETFs for free, thanks to its special offers for those who qualify for Preferred Rewards Platinum and Preferred Rewards Platinum Honors (30 and 100 free trades per month, respectively).
   

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 have a Bank of America account and/or keep a high balance. Qualifying for Preferred Rewards by having a combined balance of $50,000 with Bank of America, Merrill Edge, or Merrill Lynch gives you 30 free stock and ETF trades every single month. At $100,000, customers qualify for 100 free stock and ETF trades each month. This makes it a “no-brainer” for people who simply want to trade stocks and ETFs and can qualify for free trades.
  

• You don’t trade options heavily. Merrill Edge isn’t the best pick for options trades, since it carries a relatively high base rate ($6.95) and charges one of the highest per-contract commissions ($0.75). Unfortunately, free trades don’t apply to options trades.
  

• 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.