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Merrill Guided Investing deviates from the typical market matching index fund portfolio because of its distinct asset allocation and hands-on investment strategies created by the company’s Chief Investment Officer (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 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 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 Edge’s platform is easy to navigate, with superb goal-planning and progress charts.
- The calculators and tools enable accurate planning for retirement and other goals.
- Merrill Guided Investing customers can reduce their fees with Preferred Rewards.
- Merrill Guided Investing portfolios are created and managed by an experienced pool of 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
Integrated with Bank of America products and services
Superior educational resources, calculators, and tools for beginners through advanced investors
Fees are higher than average
Digital users don’t have access to financial advisors
No tax-loss harvesting
Company Overview
| Account Minimum | $1,000 or $20,000 with an advisor |
| Fees | Digital—0.45% AUM fee. With advisor—0.85%. Discounts available for Bank of America Preferred Rewards participants. |
| Goal Planning | Eight general categories spanning Retirement, Vacation, College, Home, Large purchase, and more are available. |
| Available Assets | ETFs, Mutual Funds, Money Market Mutual Funds, and Cas |
| Customizable Portfolio | Minor customization available—client can select funds for exclusion |
| View Portfolio before Funding | Yes |
| Customer Service | 24/7 phone, email chat |
| Financial Advisor Available | The premium plan offers financial advisors, while all investors can get help with basic platform questions from customer service representatives. |
| Cash Management | Cash sweeps into an interest-bearing account. Bank of America offers additional cash management solutions. |
| Tax-Loss Harvesting | No, although tax-aware portfolios are available. |
| External Account Sinking/Consolidation | External accounts are synced when the user sets up goals. External accounts are considered when asset allocation and goal planning is determined. |
| Mobile App | Yes—Android, iOS |
Account Setup
The account setup 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 their finances and the likelihood of reaching their stated goals. They can either choose their risk tolerance or answer a few questions that will allow the platform to provide a suggested level.
Next, clients 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 signing up, they receive a targeted asset allocation, ranging from conservative through aggressive, depending on the answers to the questionnaire. 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)
- 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. 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 provide the likelihood of clients reaching their goals, with 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 includes the probability of success. This gives the user an opportunity to adjust assumptions and/or 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% assets under management (AUM) fee. Do-it-yourself (DIY) investors can also set up a self-directed investing account through Merrill Edge, in addition to the 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 4,200 Bank of America financial centers are also available for any account-related question.
Cash Management
The cash allocation element of a client's Merrill Edge portfolio depends on the chosen investment strategy: Cash balances are swept into the bank associated with the account, and rates can be found in the footer of merrilledge.com labeled “Deposit Account & Money Fund Rates.”
Portfolio Construction
The Merrill Guided Investing portfolio construction goes beyond creating a portfolio of market-matching index funds. The CIO employs both proprietary and external investment research to build portfolios that 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 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.
| Available Assets | |
|---|---|
| Individual Stocks | No |
| Mutual Funds | Yes—only with advisor plan |
| 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
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 clients can integrate their entire investment portfolio asset allocation and goals with their Merrill Guided Investing account. This is a beneficial feature that is still uncommon among other robo-advisors.
The personal dashboard shows clients' progress towards achieving 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. To use the Guided Investing with Advisor service, 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. Rebalancing occurs when portfolios drift from preferred asset allocation and when market conditions merit changes. |
| Reporting Features | Dashboard is available 24/7, along with regular statements. |
| Tax-Loss Harvesting | No, although tax-aware portfolios are available. |
| External Account Syncing/Consolidation | External accounts are synced when the user sets up goals. External accounts are considered when asset allocation and goal planning is determined. |
User Experience
Desktop Experience
The user experience on 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 includes 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, 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, it’s good to know a human will answer the phone. 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.
- 24/7 phone support (wait times of three minutes or more at peak times)
- 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 communicating with advisors
- Bank accounts insured up to the legal limit by the FDIC and 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, and many others. The calculators for retirement, tax planning, and more will answer nearly all client 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 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.
| Compare: Schwab Intelligent Portfolios pricing | |
|---|---|
| Category | Fee |
| Management fees for $5,000 account | No fee (no access to advisor) |
| Management fees for $25,000 account | 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 the Bank of America because of the add-on benefits associated with having all accounts in one financial ecosystem. Merrill Guiding 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 still 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.