Merrill Edge is a full-service broker with low fees that’s free to access for Bank of America customers, but isn’t the best option for experienced traders.
Merrill Edge started in 2010 as a part of Bank of America’s retail banking division, Bank of America Merrill Lynch. In 2015 it held $118 billion in assets from over 2 million customers employs over 2,000 financial advisors working within Bank of America.
Anyone can open an account with Merrill Edge, but those who already have a Bank of America account will be able to link to Merrill Edge for free and view all accounts from a single screen. From this screen, Bank of America customers can manage those accounts, transfer funds, make trades, and sign up to qualify for a variety of monthly promotions.
Merrill Edge also offers a Preferred Rewards Program in which customers can qualify for free monthly trades – a feature that none of the other online stock brokers offer. Through the program, customers can get up to 30 free equity trades if their balance totals at least $50,000 after a three-month average (per quarter), or 100 free trades if their balance totals $100,000 after a three-month average.
Merrill Edge has prices that are of a median average in the online stock broker industry. The broker charges a $6.95 flat fee for stock trades and $6.95 + $0.75/contract for options trades. Mutual funds come in at $19.95 and if you opt to use a broker to assist you with any trade, Merrill Edge will charge you $29.95. There is no minimum deposit to join, which puts it among the ranks of other discount brokers with a zero minimum requirement to join like OptionsHouse, TD Ameritrade, and Ally Invest. In terms of price point, Merrill Edge is only beaten by OptionsHouse and Ally Invest. However, it lacks on things that many investors would consider important; like the restrictions on its trading platform, library of resources and education, and absence of commission-free ETFs.
|Price – Stock Trades||$6.95|
|Costs & Fees||Options: $6.95 + $0.75 contract
Mutual Fund Trades: $19.95
Broker Assisted Trades: $29.95
Account Fee: $0
Inactivity Fee: $0
|Misc. Fees||Bond Trade Fee – N/A
Treasury Trade Fee – N/A
CD Trade Fee – $0
IVR Trade Fee – $29.95
IRA Annual Fee – $0
IRA Closure Fee – $49.95
Forced Margin Sellout Fee – N/A
Returned ACH Fee – $30
Returned Wire Fee – $0
Stock Certificate Processing Fee – $25.00
Stock Certificate Delivery Fee – N/A
Paper Statement Fee – $5
Paper Confirmation Fee – $3
Domestic Wire Fee – $24.95
International Wire Fee – $24.95
|Account Types||Full service
No Forex trading
No Futures trading
|Best For||Bank of America customers
Customers who can keep a high balance (50-100K)
|Not For||Seasoned investors
Traders who want commission-free ETFs
|Margins||8.63% Under $24,999.99
7.50% $25,000.00 to 49,999.99
7.50% $50,000.00 to $99,999.99
6.13% $100,000.00 to $249,999.99
6.13% $250,000.00 to $499,999.99
5.88% $500,000.00 to $999,999.99
5.25% Above $1,000,000.00
|Services||24/7 support: phone, e-mail, live chat|
|Platform||Merrill Edge Market Pro
|Platform Features||Charting – Display Corporate Events
28 Charting & Drawing Tools
Charting – Notes
Level 2 Quotes – Stocks
Level 2 Quotes – Options
Option Chains – Streaming Real-time
Option Analysis – P&L Charts
Stock Alerts Delivery – e-mail, sound (but no text)
Streaming Time & Sales
Watchlists – Streaming Real-time Quotes
1 Research Reports – Equity Research
ETF Research – Top 10 Holdings
Mutual Fund Research – Fees Breakdown
Mutual Fund Research – Performance Analysis
Mutual Fund Research – Top 10 Holdings
Screener – Stocks
Screener – ETFs
Screener – Mutual Funds
Screener – Options
Screener – Bonds
Best for Long-Term Investing – Barron’s
Outstanding Customer Service – J.D. Power
One of the “Best Online Brokers” – Kiplinger’s
Excellence in Customer Service – International Service Excellence Awards
Merrill Edge offers a median price within the industry among the big brands and it makes it easy for Bank of America customers to begin trading from their regular bank accounts. It provides award-winning on customer service, too.
Is it True?
Yes. Merrill Edge has median industry prices and the broker makes it super easy for current Bank of America customers to link their bank accounts to a trading account if they want to begin trading. Prices come in at $6.95 per trade, $6.95+0.75/contract for options trades, and no additional charges for stocks less than $1.00 per share – a great feature for investors looking to trade penny stocks.
Needless to say, Bank of America is a huge company and they have a robust customer service department that works around-the-clock. It has been awarded by a variety of organizations for its superb customer service, and it really shines on response times by phone and live chat. Like with many organizations, support e-mails take at least 1-3 business days for a response, and that is the same with Merrill Edge.
Merrill Edge also does not require a minimum deposit to join unlike E*Trade ($500) or Scottrade ($2,500). As I have mentioned in previous reviews, zero-minimum deposits should not be the only thing that sways potential investors toward signing up. All new customers are going to have to deposit something to begin trading, so realize the $0 minimum requirement is just something many of these brokers do to look attractive to new customers. It’s beneficial in the sense that customers can start trading with any amount they want, but it is likely new customers would need ~$2,000 to start making any sort of substantial investments.
Merrill Edge has a lot to do when it comes to its trading platform, Merrill Edge MarketPro. The platform is only offered through the web, meaning there is nothing to active trading program to install. Users will need a fast browser with Java-enabled abilities which make the trading platform experience slow and clunky, especially if you have to install a bunch of java updates and patches (which seems constant with the java platform).
The platform is easy to understand and navigate, but it lacks basic features that will be important to seasoned traders. There is no ability to buy or sell with a single click, and once you do make a trade, you are asked to confirm it every single time – there’s no way to turn the confirmation screen off. Compared to other broker trading platforms, making trades through Merrill Edge MarketPro took the longest.
Seasoned traders will also be disappointed that the platform does not contain any complex options, no heat mapping, no ladder trading, and for options traders, there is no streaming real-time option chains. There’s no auto investing or virtual trading either, and if you want any stock alerts by text message, you’re out of luck. And forget about commission-free ETFs – they just don’t have any.
These won’t hinder the trading experience, but these are all bells and whistles that seasoned traders look for when it comes to trading platforms. Coupled with the fact that it takes so many steps to make a trade in MarketPro, Bank of America is really shooting themselves in the foot by not attracting active traders – the type of the investor all of these online brokers want the most, for obvious reasons.
Seasoned investors would be better off with paying a little more for TD Ameritrade’s thinkorswim, which is loaded with the research reports, heatmapping, complex options, and single-click trading missing from MarketPro. Beginner traders will do just fine with MarketPro, but they could seriously consider paying less with Ally Invest and using Ally Invest Live – basically a similar platform in every way to MarketPro and cheaper, though it may not make sense to do that if you already have a bank account with Bank of America.
Now for some good news: the research and education is solid. Bank of America provides all users with its Bank of America – Merrill Lynch Global Research combined with several third-party research providers like Lipper (for mutual fund research), Morningstar, Recognia, and S&P Capital IQ. The research spans everything: ETFs, mutual funds, pink sheets, fixed income, top 10 holdings, and all the screeners (stocks, bonds, options, mutual funds, and ETFs). There are three equity research reports.
In terms of educational resources, Merrill Edge offers everything all of the other brokers offer except client webinars and community forums. Nevertheless, customers will have to rely on broker assistance and customer service to make up for these absences. Aside from that, customers will find investor dictionaries, live seminars, videos, and a basic retirement calculator.
Casual investors, and especially those who already do business with Bank of America, will find all of these offerings to be a good fit. They won’t need the bells and whistles seasoned investors will be looking for, and will appreciate the platform’s ease of use and reliable customer service.
Our Deep Dive
- Costs and more: Merrill Edge offers a flat $6.95 stock trade fee across the board. It also offers a $6.95 Options base fee + $0.75 contract. Mutual funds are $19.95 (OptionsHouse is $20.00; TD Ameritrade is $49.99) and broker-assisted trades are $29.95 (OptionsHouse is $25.00; TD Ameritrade is $44.99). There is no minimum deposit required to sign up.
- Learning curve: Signing up is super easy, especially if you have a Bank of America account – it can be linked to a Merrill Edge account in a couple of quick and easy steps.
- The platforms: Merrill Edge provides Merrill Edge MarketPro, which is solely web-based; there is no active trading platform. The platform is easy to use, but there are some restrictive features. It is not customizable, is missing many streaming data / complex options, and it is impossible to make a trade with a single-click (it’s a multi-tiered process).
- Research: Solid research from Merrill Lynch Global Research combined with several third-party research providers like Lipper (for mutual fund research), Morningstar, Recognia, and S&P Capital IQ. Most of the other online brokers use either Morningstar or Lipper, so it’s great that Merrill Edge contains both, as well as the other third-party providers.
- Customer service: It’s stellar. Bank of America isn’t going anywhere, so customers will have this corporate giant’s customer service department available 24/7 (or by email or live chat). Its customer service is award-winning, and most reviews of Merrill Edge mention Bank of America’s customer service as an outstanding feature.
Merrill Edge charges a flat rate of $6.95 per stock trade, $6.95 + 0.75 for Options, and $19.95 for Mutual Fund trades. If you are only looking at price point, Merrill Edge is only a couple of bucks more expensive than OptionsHouse and Ally Invest. Those considering only price point would likely stay away from the more expensive brokers like TD Ameritrade ($9.99 + 0.75 per contract). or E*Trade ($6.95 + 0.75). Merrill Edge’s price is more close to Scottrade’s price on per-stock trades ($7.00 + 0.70) but Merrill beats it on mutual fund trades ($19.95 vs $49.95). Scottrade also requires new customers to deposit at least $2,500 to start as well.
|Merrill Edge||OptionsHouse||TD Ameritrade||Scottrade||E*Trade||Ally Invest|
|Options fee||$6.95 + 0.75||$4.95 + 0.50||$9.99 + 0.75||$7.00 + 0.70||$6.95 + 0.75||$4.95 + 0.65|
|Mutual Fund fee||$19.95||$20.00||$49.99||$49.95||$19.99||$9.95|
Cheaper (or Free!) Alternatives
No major brand name firm can beat Ally Invest on prices, although OptionsHouse comes close. Merrill Edge is just $2 more for per trade compared to these, although OptionsHouse has a better platform for experienced traders and Ally Invest has a great platform for beginners.
Scottrade: $7.00 flat free trade plan; $2,500 min. deposit. Scottrade is one of the more expensive online brokers out there, but it offers cheaper trades without a tiered pricing system. It’s also one of the few online brokers with physical brick-and-mortar stores in nearly every state.
E-Trade: $6.95 flat free trade plan; $500 min. deposit. E-Trade is largely recognized by its humorous television commercials, and while it is not the most affordable, it markets to a large audience and therefore maintains a valuable customer-oriented presence similar to Scottrade.
OptionsHouse: $4.95 flat free trade plan; $0 minimum deposit. OptionsHouse is extremely affordable, offering stock trades at half the price of many of its competitors. It often tops the list of online stock broker reviews.
Ally Invest: $4.95 flat free trade plan; $0 minimum deposit. Ally Invest has gone through several evolutions since its formation in 2005. It has since emerged as a formidable competitor with affordable rates that are attractive to new investors.
TD Ameritrade: $9.99 flat free trade plan; $0 minimum deposit. TD Ameritrade is known for being a well-rounded and affordable broker but also one of the more expensive brokers out there in terms of its trading fees.
What Others Are Saying
- The Wall Street Journal reports that Merrill Edge will soon launch a Robo Adviser.
- Investment News reported that Merrill eliminated the commission IRA business in response to a DOL fiduciary rule.
- Fox Business reported about the new fees associated with Merrill retirement accounts.
If you are a beginner investor and already have a Bank of America account, Merrill Edge is a good broker to use to get started in online stock trading at a reasonable price. Seasoned investors who really care about platform and price points should probably look elsewhere.