Merrill Guided Investing Review

Merrill Guided Investing deviates from the typical market matching index fund portfolio with distinct asset allocation and hands-on investment strategies by the company’s Chief Investment Officer. Existing Bank of America and Merrill Lynch customers can easily transition to the Merrill Guided Investing platform for their managed assets while maintaining banking and self-directed investing with the company. Although the fees tend to be higher than those of competitors, users can reduce costs through the Preferred Rewards program. We’ll take a deeper look at Merrill Guided Investing to help you decide whether it is the robo-advisor for you.

Company Overview

Account Setup

The account set up with Merrill Guided Investing is a breeze. As is customary, investors answer the basic investment questions that span goals, financial contributions, and timelines. Merrill enables users to include outside accounts in the analysis to provide a comprehensive picture of your finances and the likelihood of reaching your stated goals. You can either choose your risk tolerance or answer a few questions which will allow the platform to provide it for you. 

Next, you’ll choose a goal from among eight choices, and provide your goal a custom name. Clients then pick either a market tracking or sustainability-focused portfolio. Before signing up, you receive your targeted asset allocation from conservative through aggressive, depending on your answers to the questionnaire. Finally, choose your account type and fund your account, with the required $1,000 minimum (or more). Chat and phone customer service are readily available throughout the setup process. 

Merrill Guided Investing investors can choose from a variety of account types:

• Individual and joint brokerage accounts
• Custodial - Uniform Transfers to Minors Act (UTMA) and Uniform Gift to Minors Act (UGMA) 
• Cash Management Accounts
• Retirement - Traditional, Roth, simplified employee pension (SEP), and rollover individual retirement accounts (IRAs)
  

Goal Planning

Merrill is specific and clear in the goal-planning department. You can choose from the following eight goals:

• Retirement
• General Investing
• Home
• Education
• Family Support 
• Travel
• Special Occasion
• Other Large Purchase

Simulations are built in to provide the likelihood of reaching your goals, with the opportunity to adjust your assumptions. The tools and calculators enable users to plan for most major financial decisions including retirement, college planning, and basic personal finance scenarios. The personal retirement and required minimum distribution (RMD) planner are great for those nearing or already in retirement, while the personal finance calculators encompass cash flow and estate planning tools. 

Ongoing goal monitoring updates your progress and includes the probability of success. This gives the user an opportunity to adjust their assumptions and/or their contributions towards the goal. For more accurate goal tracking, clients can add additional income sources, external accounts, and track contributions.

Account Services

The digital version of Merrill Guided Investing is fine for those who are younger and don’t require in-depth financial planning advice. However, investors seeking a robo-advisor plus financial planner will benefit from the option to add an advisor to the online investment management. The advisory model requires a $20,000 minimum deposit and charges an 0.85% AUM fee. Do-it-yourself investors can also set up a self-directed investing account through Merrill Edge in addition to the Merrill Guided Investing account. 

If you are a Bank of America customer, one login enables you to integrate banking, self-directed investing, and Merrill Guided Investing robo-advisory services. Auto deposits and transfers are seamless. The 2,000 Bank of America financial centers are also available for any account-related question. 

While the fees are on the high side in contrast with competitors, 70% of Merrill Guided Discovery users and 84% of the advisory clients receive fee discounts through the Bank of America Preferred rewards program, according to a company representative.

Cash Management

Depending on the investment strategy you choose, your Merrill Edge portfolio has a cash allocation element. Cash balances are swept into the bank associated with the account. Rates can be found in the footer of merrilledge.com labeled “Deposit Account & Money Fund Rates.”  

For additional cash management solutions, users need to open a self-directed cash management account with Merrill, which can be synced with the Merrill Edge account. The cash management account provides access to check writing, debit card, auto-deposit, and investment products. This account charges a $125 annual management fee, which is a bit steep. The management fee looks even higher when competitors are offering similar accounts without annual management fees.

Portfolio Construction

The Merrill Guided Investing portfolio construction goes beyond creating a portfolio of market-matching index funds. The Merrill Investment Solutions Group (ISG) and the Chief Investment Officer (CIO) employ both proprietary and external investment research. These portfolios strive to outperform passive, market-matching index fund portfolios. 

All portfolio models are offered in a range of five risk levels, ranging from conservative to aggressive. The digital version of Merrill Guided Investing includes either market tracking or sustainably focused portfolios. The market tracking portfolios are designed for either retirement accounts or taxable accounts, with “tax-aware” construction. The advisor model offers 10 Alpha Seeking portfolios that integrate market tracking index funds and actively managed mutual funds with the goal of beating market returns.

The investment portfolios are constructed and managed using strategic and tactical asset allocations which vary based upon the user's specific goals, risk tolerance, financial situation, timeline, and expected returns, as well as current and predicted market conditions. In order to avoid conflict of interest, the company does not use any proprietary funds. The lack of proprietary funds shows concern for transparency and ethical management.

Portfolio Customization

Limited portfolio customization is available with Merrill Guided Investing. Although clients can’t select specific assets, they can specify restrictions to exclude a particular fund.

Portfolio Management

Merrill Guided Investing strategies vary from the typical robo-advisor management, in that they are actively managed. Portfolios are not rebalanced on a schedule but based on market conditions and the chance to take advantage of higher return or lower risk investment opportunities. Accounts are also monitored for adherence to the client’s preferred asset allocation and rebalanced when appropriate. Outside accounts are considered when managing the account, so you can integrate your entire investment portfolio asset allocation and goals with your Merrill Guided Investing account. This is a beneficial feature that is still uncommon among other robo-advisors.

The personal dashboard shows your progress towards achieving your financial goals. The graphic shows how much you’ve contributed to the goal, how much remains, and whether you’re on track or not. Merrill requires clients to complete a periodic review to ensure that their portfolio remains aligned with their goals. As goals, timelines, and risk tolerance change, so will your asset allocation.

User Experience

Desktop Experience

The user experience on Merrill Guided Investing is excellent. The platform is easy to navigate and the tools, insights, information, and resources are among the best. The dashboard includes your goal progress, account value, activity, educational market outlooks, asset allocation, investment returns, and easy access to all the platform resources. It’s easy to navigate and any questions can be handled with chat or 24/7 customer service.

Mobile Experience

The mobile app available on iOS and android, is a rare find with all of the desktop features included on the app. Additionally, you can access your Merrill accounts from either the Bank of America or the Merrill app. The planning tools are accessible on mobile as well as the Guided Investing dashboard. Robo-advisor users can track account details, strategy, activity, performance, and goal progress.  

The robust in-app features include all of the previously discussed desktop features plus:

• Market news
• Check deposit
• Fund transfer
• Spending and budgeting
• Guidance and retirement

Customer Service

Merrill Guided Investing shines when it comes to customer service thanks to its integration with Merrill Edge and Bank of America. With 24/7 phone customer service, it’s good to know a human will answer the phone. The chatbot is readily available as well if you are looking for general information. Unfortunately, phone wait times can be up to three minutes or more during busier times. Although trained customer service representatives are available, only the Premium Merrill Guided Investing clients can speak with a financial advisor. The website Help & Support page consists of FAQs and other sources of information that are comprehensive and a strong addition to the 24/7 phone customer service and chatbot.

• 24/7 phone support (wait times of three minutes or more at peak times)
• Chatbot
• Comprehensive FAQs and support center
• Premium Merrill Guided Investing clients can speak with a financial advisor
  

Security

As a member of the Bank of America and Merrill Lynch families, users can expect bank-level security. 

• Two factor authentication
• Merrill uses an SSL SHA2-256-bit hash algorithm for securing the website and mobile apps
• The bank accounts are insured up to the legal limit by the FDIC, while the firm carries standard and additional SIPC insurance through Lloyd’s of London

Education

Merrill Edge is highly regarded for its strong educational offers. The educational vertical includes white papers, calculators, and courses, as well as high-quality webinars, videos, and articles.

The educational topics are categorized from beginner to advanced. Topics range from platform-specific to investment asset information and strategy. Investment topics include investment risk, tax-efficient investing, growth vs value, socially responsible investing, along with scores of additional topics. The calculators for retirement, tax planning, dollar-cost averaging, and more will answer nearly all your questions.

Commissions and Fees

Similar to most robo-advisors, there are no trading fees. The investment management fees for the all-digital plan are 0.45% of assets under management (AUM), charged monthly. The digital plus financial advisor charges 0.85% of AUM. The Preferred Rewards Program nets reduced fees for most clients.

In addition to the annual AUM account management fee, all mutual and ETFs charge expense ratios, which are paid to the specific investment fund companies. In contrast with Merrill, Schwab Intelligent Portfolios offers free investment management for their digital customers and a low subscription-based pricing model for their Premium offer.

Methodology

Our mission at Investopedia is to provide investors with reviews and ratings of robo-advisors that are comprehensive and unbiased. Our team of researchers and expert writers, led by Michael Sacchitello, spent months evaluating all aspects of a robo-advisor’s platform, including the account setup process, goal planning tools, account service options, portfolio construction offerings, portfolio management, mobile and desktop user experience, educational content, fees, and security. As part of this evaluation, we extract critical data points that are weighted by our quantitative model that produces a powerful star-scoring system.

With the individual investor in mind, we’ve designed a comprehensive ranking methodology to find the best overall robo-advisors and the best robo-advisors across nine key categories. Each advisor is then scored across multiple variables to rate performance in every applicable category. The score for the overall award is a weighted average of the categories.