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Merrill Guided Investing deviates from the typical market-matching index fund portfolio with its distinct asset allocation and hands-on investment strategies created by the company’s Chief Investment Office (CIO). 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 bank. Although the fees tend to be higher than those of competitors, users can reduce costs through the Preferred Rewards program. We’ll take an in-depth look at Merrill Guided Investing to help you decide whether this is the robo-advisor for you.
Important
Aside from this Merrill Guided Investing robo-advisor review, we've also reviewed Merrill Edge's traditional brokerage services.
Key Takeaways
- Merrill Guided Investing strategies are actively managed, in contrast to most robo-advisors.
- The calculators and tools enable accurate planning for retirement and other goals.
- Merrill Guided Investing clients can reduce their fees with Preferred Rewards.
- Portfolios are created and managed by experienced financial experts.
- The company’s 24/7 customer service is excellent.
Actively managed portfolios strive to outperform market returns
24/7 phone customer service available
Accounts are integrated with Bank of America products and services
Superior educational resources, calculators, and tools for beginners through advanced investors
Fees are higher than average
Base plan has no access to financial advisors
No tax-loss harvesting
Company Overview
| Founded | Established in 1914 was long known as Merrill Lynch & Co.; acquired by Bank of America in 2009 |
| Headquarters | New York, N.Y. |
| Account Minimum | $1,000 or $20,000 with an advisor |
| Fees | Online only—0.45% AUM fee, with advisor—0.85%; discounts available for Bank of America Preferred Rewards participants |
| Goal Planning | Eight general categories, including Retirement, General Investing, Home, Education, Travel, and more |
| Available Assets | ETFs, Mutual funds |
| Customizable Portfolio | Client can select funds for exclusion |
| View Portfolio before Funding | Yes |
| Customer Service | 24/7 phone, chat |
| Financial Advisor Available | With the premium plan |
| Cash Management | Small allocation to cash that earns interest; Bank of America offers additional cash management solutions |
| Tax-Loss Harvesting | No |
| External Account Syncing/Consolidation | External accounts are synced at goal setup and considered for asset allocations and goal planning |
| Mobile App | Yes—Android, iOS |
Account Setup
The account setup with Merrill Guided Investing is a breeze. As is customary, investors answer basic investment questions that deal with goals, financial contributions, and timelines. They can include outside accounts in Merrill's analysis for a comprehensive picture of their finances and their ability to reach their stated goals. Investors can either choose their risk tolerance or answer a few questions that will allow the platform to suggest a level.
Next, investors choose a goal from among eight selections and provide a customized name for the goal. They then pick either a market-tracking or sustainability-focused portfolio. Before completing the signup, they receive a targeted asset allocation, ranging from conservative to aggressive, based on their questionnaire answers.
Finally, they choose the account type and fund the account with the required $1,000 minimum (or more). Chat and phone customer service are readily available throughout the setup process.
Merrill Guided Investing clients 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)
- Retirement—traditional IRA, Roth IRA, simplified employee pension (SEP), SIMPLE IRA, 401(k) to IRA rollover
Goal Planning
Merrill is specific and clear in the goal-planning department. Clients 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 demonstrate the likelihood that clients can reach their goals. Clients then have the opportunity to adjust their 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 calculator is great for those nearing or already in retirement, while the personal finance calculators encompass cash flow and education planning tools.
Ongoing goal monitoring updates client progress and the probability of success. This gives investors the opportunity to adjust assumptions and/or contributions toward the goal. For more accurate goal tracking, clients can add additional income sources, external accounts, and track contributions.
Account Services
The online-only version of Merrill Guided Investing is fine for those who are younger and don’t yet require in-depth financial planning advice. It charges an annual 0.45% of assets under management (AUM) and has a minimum investment of $1,000.
However, investors seeking a robo-advisor plus financial planner may benefit from the option to add an advisor to their online investment management. The advisory model requires a $20,000 minimum deposit and charges an annual 0.85% AUM fee.
Do-it-yourself (DIY) investors can also set up a self-directed investing account through Merrill Edge, as a complement to their Merrill Guided Investing account.
For Bank of America customers, one login enables the integration of banking, self-directed investing, and Merrill Guided Investing robo-advisory services. Auto deposits and transfers are seamless. The approximately 3,900 Bank of America financial centers are also available for any account-related question.
Cash Management
Merrill Guided Investing allocates some percentage of your portfolio to cash. Even if you select high risk tolerance a small percentage of your managed funds will be held in cash. This differs from other robo-advisors, which tend to invest all of your managed funds in the investment account and offer separate cash management accounts similar to bank accounts. Obviously, Bank of America offers a variety of cash accounts.
Portfolio Construction
The Merrill Guided Investing portfolio construction goes beyond creating a portfolio of market-matching index funds. It also involves a CIO who employs both proprietary and external investment research to build portfolios that strive to outperform passive index fund portfolios.
All portfolio models are offered in a range of three risk levels, from low to high. The online version of Merrill Guided Investing includes either market-tracking or sustainably-focused portfolios.
The investment portfolios are constructed and managed using strategic and tactical asset allocations, which vary based on 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. This shows concern for transparency and ethical management.
| Available Assets | |
|---|---|
| Individual Stocks | No |
| Mutual Funds | Yes |
| Fixed Income | Mutual funds and ETFs |
| REITs | No |
| Socially Responsible or ESG Options | Yes |
| ETFs | Yes |
| Non-Proprietary ETFs | Yes |
| Private Equity | No |
| Crypto, Forex | No |
Portfolio Customization
Clients have a limited ability to customize their portfolios with Merrill Guided Investing. While they cannot 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 according to a schedule but rather, are 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 clients can integrate their entire investment portfolio asset allocation and goals with their Merrill Guided Investing account. This advantage is still uncommon among robo-advisors.
The personal dashboard displays clients' progress toward their financial goals. The graphic shows how much they've contributed to the goal, how much remains, and whether they're on track or not.
Merrill requires that the client complete a periodic review to ensure that their portfolio remains aligned with their goals. As goals, timelines, and risk tolerance change, so will their asset allocation.
| Key Portfolio Management Features | |
|---|---|
| Automatic Rebalancing | Rebalancing is done with human oversight and occurs as preferred asset allocations and market conditions change. |
| Reporting Features | Dashboard is available 24/7, along with regular statements. |
| Tax-Loss Harvesting | No |
| External Account Syncing/Consolidation | External accounts are synced when the user sets up goals and considered when asset allocation and goal planning are determined. |
User Experience
Desktop Experience
The user experience with Merrill Guided Investing is excellent. The desktop platform is easy to navigate, and the tools, insights, information, and resources are among the best. The dashboard shows goal progress, account value, activity, market outlooks, asset allocation, investment returns, and offers easy access to all the platform resources. The platform is easy to navigate and any questions are handled with chat or 24/7 customer service.
Mobile Experience
The mobile app, available for iOS and Android, is a rare find, given all of the desktop features included in the app. Additionally, clients can access their Merrill accounts from either the Bank of America or the Merrill app. The planning tools are accessible on mobile, as is 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, you can depend on dedicated human assistance.
Although trained customer service representatives are available, only the Premium Merrill Guided Investing clients can speak with a financial advisor. However, the website Help & Support page consists of FAQs and other comprehensive sources of information that are a useful addition to the 24/7 phone customer service.
- 24/7 phone support (wait times of three minutes or more at peak periods)
- 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
- Encrypted messaging for communications with advisors
- Cash in bank accounts insured up to the legal limit by the FDIC
- Securities insured by SIPC and additional coverage with Lloyd's of London
Education
Merrill Guided Investing is highly regarded for its strong educational offering. This resource 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, and many others. The calculators for retirement, tax planning, and more can answer nearly all client questions.
Commissions and Fees
Similar to most robo-advisors, there are no trading fees. The annual investment management fee for the online-only plan is 0.45% of AUM, assessed monthly. The online-plus-financial advisor annual charge is 0.85% of AUM.
The Preferred Rewards Program can lower fees if you qualify. 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 an option that is free of any management fees. Customers only pay the fund expense ratios. It also offers a premium version with access to a certified financial planner that does charge a management fee.
| Compare: Schwab Intelligent Portfolios pricing | ||
|---|---|---|
| Account | Minimum Investment | Management Fee |
| Schwab Intelligent Portfolios | $5,000 | No fee (no access to advisor) |
| Schwab Intelligent Portfolios Premium | $25,000 | One-time planning fee of $300, monthly fee of $30 |
Final Verdict
Merrill Guided Investing is among the more feature-rich robo-advisors we have reviewed. It is great for existing clients of Bank of America because of the add-on benefits associated with having all accounts in one financial ecosystem.
Merrill Guided Investing will also be attractive to investors seeking extensive education resources. The 24/7 customer service is a plus that will be appreciated by those investors seeking a human touch within their robo-advisory. However, the Merrill Guided Investing fees are on the high side and investors will need to decide if the fees are worth the value that the platform offers.
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.