Merrill Edge has continued to evolve by making a deeper connection between the online brokerage and Bank of America's vast banking capabilities. The brokerage launched in 2010. Over the past year, there have been numerous updates across the online and mobile experiences based on client requests, highlighting the firm's commitment to servicing investors better.
If you have a significant relationship with BofA, it's worth it to open a Merrill Edge account to take advantage of the premium rewards, which include discounts on mortgage origination and auto loan interest rates, free ATM transactions, and increased interest rates on uninvested cash. We’ll look at the progress Merrill Edge has made compared to its more established peers and help you decide whether it is the right fit for your investing needs. Aside from this Merrill Edge broker review, we've also reviewed the Merrill Edge Guided Investing robo-advisor service.
- Rated one of our best brokers for beginners because of its customer service standards.
- Does not accept payment for order flow, its order routing practices focus on price improvement.
- Huge library of proprietary research and stock rankings for fundamental research.
- Focused on connecting the investing and banking experience.
Who Merrill Edge Is For
Beginning and intermediate-level long-term investors will be well-served by Merrill Edge’s technology and wide range of services. Taken solely as an online brokerage, Merrill Edge competes by offering a robust and comprehensive platform that can serve traders or investors. When taken as part of Bank of America’s larger financial services universe, however, Merrill Edge offers another layer of convenience. For example, customers who want face-to-face contact with a financial consultant can walk into almost any Bank of America branch for help. Similarly, the depth of the educational offerings greatly benefits from being tied to a bigger financial institution. One knock on Merrill Edge is the fact that more affluent customers get more out of the platform for less. This can be a turn-off for newer investors with limited capital.
Merrill Edge's portfolio analysis tools provide a comprehensive look into your assets.
Merrill Edge accounts can be integrated with Bank of America and customers can qualify for unique benefits.
Excellent proprietary and third-party research.
Relatively high options fees and margin interest.
Online options spreads limited to two legs.
No futures, futures options, or cryptocurrency trading.
- Merrill Edge's portfolio analysis tools, starting with their Portfolio Story, let clients take a deep dive into how their assets are working for them. You can import assets held at other financial institutions for a more complete picture.
- Clients with more than $100,000 in qualifying assets combined with Bank of America and Merrill Edge qualify for benefits that can save or make you money.
- Merrill Edge offers top-notch proprietary and third-party research capabilities geared for fundamental investors.
- Per-contract options fees and margin interest rates are on the high side.
- Options spreads traded online are limited to two legs. You can trade more complex spreads by phoning the order into a live broker.
- You cannot trade futures, futures options, or cryptocurrencies with Merrill Edge. Some clients may grow out of the firm’s offerings as they develop an interest in more complex derivative trading.
It’s simple to get up and running on Merrill Edge, especially if you're already a Bank of America customer. Five tabs across the top of the screen keep the broker's features at your fingertips. From there, you can launch the streaming app, MarketPro, which opens in a separate window. The website isn't customizable, but MarketPro lets you set up trading defaults and arrange widgets on the page to your specifications. MarketPro is now available to all Merrill Edge clients; the firm eliminated its previous account size and activity requirements in spring 2020.
Merrill Edge is putting more of an emphasis on personalization rather than customization by making things the client uses repeatedly easier to find. Your news feeds, for example, can be filtered to show only the content relevant to your holdings and watchlists. During 2020, Merrill Edge plans to focus on using artificial intelligence to figure out which features each client most wants to use and making them more accessible.
Most of the features you'll find on the website are also available on the mobile app. Watchlists are shared between the web and the mobile app, though watchlists you set up on MarketPro are not, as those customizations are saved on the local device rather than in the cloud. You can see watchlists you’ve set up on the web or mobile in MarketPro, however. You cannot trade fixed income on the mobile app, but all other available asset classes can be traded. Though there is charting capability on the mobile app, price data does not stream and there are no drawing tools.
The trading experience across Merrill Edge's platforms is relatively consistent and straightforward. Trading on any platform involves selecting the asset class, which opens an order ticket. If you’re trading a particular options strategy, the order ticket is designed to make sure you don’t make any huge mistakes. You can’t trade spreads of three or more legs online, though. MarketPro lets you set some trading defaults and you can change the layout to suit your preferences. Despite the customizations, it is important to note that the Merrill Edge and MarketPro experience is geared more towards long-term investing rather than active, positional trading.
Mobile Trade Experience
You'll get a good picture of your funds available for trading on the Merrill Edge app; the enhanced balance feature shows settled and unsettled cash, plus all of the margin balance values. Though quotes do not stream on mobile, you can update price data or news feeds by dragging the page down and letting go. Pricing data on charts lags a few seconds behind real-time and there does not seem to be a refresh option—again, this is one of those subtle indications that Merrill Edge wants you to buy and hold rather than trade. You can filter which news feeds are displayed in the app just as you can online. Other than charts, the data is almost always up-to-date assuming you refresh the page as needed.
Range of Offerings
Equities, options and mutual funds can be traded on the mobile apps, but you cannot trade fixed income through the app. Merrill Edge does not offer futures, futures options, or cryptocurrency trading. Some international transactions can be made with the help of a live broker. Investors can trade the following with Merrill Edge, both on the website and on MarketPro:
- Stocks long and short. For short sales, Merrill Edge has automated the borrow process to provide instant locate when inventory is available, which includes stocks that traditionally are found on an easy-to-borrow list.
- OTCBB (penny stocks). There are certain restrictions in place that could limit OTCBB transactions based on market cap.
- Mutual funds (approximately 3,000 no-load, no transaction fee).
- Bonds: corporate, municipal, treasury, CDs.
- Single leg and two-leg options.
- Robo-advisory integrated into website and mobile app.
- International trades via live broker.
Merrill Edge clients can input basic order types on the website, mobile app, and MarketPro, but none of the conditional orders traders will want. If you've been buying into a particular stock over time, you can select the tax lot when closing part of the position, or set an account-wide default for the tax lot choice (such as average cost, last-in-first-out, etc.). You can also set an account-wide default for dividend reinvestment.
The Bank of America Merrill Lynch (BofAML) smart order routing technology looks for both displayed and reserve liquidity at hidden and visible venues at each price level up to the limit price of the order. If the order becomes unmarketable, the router will post any residual quantity across multiple venues, redistributing residual posted share quantities dynamically as executions occur. The order router prioritizes price improvement rather than speed of execution. As mentioned, Merrill Edge does not accept payment for order flow from market makers.
You cannot automate a trading strategy on Merrill Edge.
Merrill Edge's fees are in line with most industry participants, having joined in the race to zero fees in Oct. 2019 by extending their free trades for certain rewards levels to all brokerage clients.
- Merrill Edge charges no commissions for online equity, ETF, or OTCBB trades.
- There is no per-leg commission on options trades. Per-contract commissions are $0.65.
- An order for 50 options contracts is $32.50.
- Covered call trade of 500 shares plus 5 contracts would cost $3.25.
- Mutual fund commission for funds outside the No Transaction Fee program is $19.95.
- Fixed income trades for secondary issues are $1 per bond.
- Margin interest ranges from 10.13% for $10,000 balance to 7.63% for over $100,000 as of January 2020
- No fees for inactivity, receiving wires, sending checks, or paper statements and trade confirmations.
- Sending a wire is $24.95.
- There is a $49.95 fee for fully transferring an account out. No fee for a partial transfer.
- Account closure fee is $49.95 for retirement accounts.
- Live broker fee is $29.95 per trade.
How This Broker Makes Money From You and for You
The pressure of zero fees has changed the business model for most online brokers. In lieu of fees, the way brokers make money from you is less obvious—as are some of the subtle ways they make money for you.
- Interest on cash: Merrill Edge makes money on the difference between what you are paid on your idle cash and what they can earn on customer cash balances. You can select either a bank deposit account or a money market account for your cash, and it is automatically swept to earn interest that ranges at least half of the Federal Funds rate. If you do not make a choice, you are paid just 0.05% on your cash balance.
- Stock loan program: Merrill Edge earns revenue loaning stocks in your account for short sales and does not share that revenue with you.
- Payment for order flow: Merrill Edge does not engage in payment for order flow (PFOF). This is the practice where a broker accepts payment from a market maker for letting that market maker execute the order.
- Price improvement: Rather than focus on receiving payment for order flow, Merrill Edge's smart order router looks for quality trade executions. Their clients achieve, on average, price improvement of just under $0.02 per share on orders executed through their smart order routing system. This can net you almost $2 for an order of 100 shares.
- Portfolio margining: Merrill Edge does not offer portfolio margining, which can lower the amount of margin needed based on the overall risk calculated. Typically, portfolio margining works best for customers who trade derivatives that offset the risk inherent in their equity positions.
- Merrill Edge does not offer portfolio margining
- Merrill Edge does not have a stock loan program
- Interest rate paid on cash balances is 0.05%, or you can have idle cash swept into a money market fund
- Once you enroll in a cash sweep program, idle cash is automatically moved to a money market fund
- Merrill Edge clients can enroll dividend-paying stocks in a DRIP program
Fundamental research shines at Merrill Edge. Bank of America and Merrill Lynch have a huge library of proprietary research and stock rankings.
There’s a customizable stock screener available from the Research/Stocks page. You can add criteria weighting to the screener so it ranks the list of resulting stocks according to how well they fit. There are numerous pre-defined screeners including "Warren Buffett Stocks" and "Cash Cows." You can filter by environmental, social, and governance (ESG) ratings as well. Technical screeners are provided by Recognia. All of the screeners can be saved for later re-use.
The Research/ETFs menu choice brings you to a page with numerous tools. A basic screener is at the top, or links to find funds that contain stocks you've looked at recently. There are pre-defined screeners available by sector, or you can scroll a little further down the page to the customizable screener. You can create and save up to 20 customized screens.
Mutual Fund Screener
The Research/Mutual Funds menu choice has several screeners and a wealth of information about available funds which are all very easy to use, with quick links to placing a trade. No transaction fee funds are clearly labeled as such. The screeners include Morningstar and Lipper ratings plus many other criteria. The Fund Story feature goes in depth on each mutual fund, and offers terrific information, especially for customers new to the markets.
Under Research/Options you’ll find a screener and also a list of calls one can write for open stock positions. Or pick the Options Strategy Builder, which guides the user through coming up with an options trade based on outlook for the underlying stock. The MarketPro platform includes tools by Recognia and OptionsPlay.
Fixed Income Screener
The Research/Fixed Income menu choice includes a screener that can access about 7,000 secondary bond issues and currently open new-issue CDs. The proprietary screener is very basic and not as well-designed as the various equity screeners. It allows search by bond type, maturity date, price, yield, rating, and other criteria. You can choose a bond to trade right out of the screener.
Tools and Calculators
Merrill Edge supplies a long list of tools on the website that cover topics such as retirement, general personal finance, college planning, and portfolio planning.
Trading Idea Generator
Aside from screeners tools listed above, there isn’t yet an explicit trade idea generator. Under Research/Stocks there are thematic lists of companies to consider. Merrill Edge is working on a new feature that it plans to launch in mid-2020 that will bring together proprietary and third-party research to generate thematic trading ideas. It will be a combination of thematic, ESG, and traditional investing.
Merrill Edge offers over 30 new sources, including Associated Press, BBC Newsfile, Briefing.com, Business Wire, Canada Newswire, Dow Jones, The Economist, Globe Newswire, Information Week, The Guardian U.K., Investor’s Business Daily, Marketwire, PR Newswire, Reuters, Wall Street Journal, United Press International, and the Xinhua News Agency. Clients can filter the news stream by holdings or watchlists, and can uncheck certain news providers.
Merrill Edge added a searchable database of the past six months' worth of analyst reports for approximately 1,500 equities to the website. You can also read the quarterly Fixed Income Digest if you're a bond investor. You can dive into quantitative research and data on emerging markets. Information on individual equities can be viewed in the Stock Story feature, which pulls in data from dozens of sources.
There is an emphasis on impact investing with MSCI ESG scores on stock pages and in Stock Story. The Fund story feature, rolled out during 2019, shows you an in-depth picture of ETFs and mutual funds and also includes MSCI ESG ratings. These "story" pieces are beautifully designed and gently guide a client through effectively researching a stock or a fund.
Merrill Edge MarketPro has full charting and customization capabilities with streaming data, free of charge for clients that qualify based on assets held or trades executed. Limited charting capabilities are available on the website and mobile applications, including comparison of peers, major indices, sectors or any other symbol on the chart; and a small group of technical indicators based on momentum, trend or volume. The mobile charts can include corporate events such as dividends, earnings, and stock splits.
Merrill Edge's portfolio analysis capabilities are excellent and using these tools is highly recommended not matter how experienced you are at investing. Portfolio Story, Merrill Edge’s website-based analysis feature for your investments, offers a two-minute streaming report that grabs real-time data to display insights on portfolio performance. This mini-video links into a longer multi-chapter dive into holdings. From there you can dig into individual portfolio items, including links out to Stock Story or Fund Story, and get an overall ESG rating on your portfolio. It’s one of the best pieces of portfolio analysis technology we’ve seen, and is especially helpful for those new to investing.
A new feature launched in May 2020, Dynamic Insights, displays AI-driven insights and analysis on each client’s holdings, accounts, and current market conditions. The reports adapt to portfolio and market changes in real-time. Investors can also see how their investments align with their personal values through access to environmental, social, and governance ratings for their portfolios, along with ratings for individual stocks and funds.
Options-specific portfolio performance can be studied by using the Holdings by Product Class view on the website. Portfolio X-Ray from Morningstar is also available on the website, while MarketPro has its own customizable portfolio analysis tool. The mobile apps have an asset allocation tool.
Balances, buying power, and margin information is updated in real-time, as is internal rate of return. Merrill Edge does not have a tool that helps you figure out the tax impact of a planned trade though you’ll find some proprietary functionality for reporting capital gains. The platforms do not include a trading journal, but you can attach notes to a symbol in your holdings or watchlists.
Merrill Edge's Investor Education center starts out by asking, "How do you like to learn?" You can pick an experience level (beginner, intermediate, or advanced) or a topic (including investing and markets, options, mutual funds, and others). From there you can select a format, sorted by articles, videos & webinars, courses, or calculators. There is an entire page devoted to those new to investing that lays out the investing cycle, which begins with prioritizing your financial goals.
Merrill Edge clients can choose a Morningstar Classroom, which offers a series of courses that can be tailored. These classrooms include videos and articles with the occasional quiz. There is a mobile optimized Guidance and Retirement Center in the native mobile apps, and the education capabilities include retirement planning, college planning, life priorities, financial education and insights from thought leaders.
- 24/7 phone line
- Online chat
- FAQs primarily focused on trading-related information
- You can talk to a live broker (there is a surcharge for any trades placed via the broker)
- Non-U.S. residents cannot open an account
There is a phone line available for technical support or trading assistance 24/7 which is answered relatively quickly, though you start with an automated menu before being routed to a human. You'll find a financial consultant available in almost every Bank of America branch nationwide, so you can walk in if you need in-person assistance. These consultants are primarily focused on life stage planning.
Support on Twitter appears to be supplied primarily by Bank of America personnel; the @MerrillEdge Twitter account mostly posts investing information. On Feb. 3, there was a website outage for about 30 minutes, but there was no activity on Twitter offering support.
Merrill Edge's security is up to industry standards:
- Biometric entry (fingerprint scanner or face recognition) for mobile devices.
- Soft token for login and high risk trade authorization available through text, phone and email.
- A device token is offered through the SafePass card for high risk trade authorization.
- Excess Securities Investor Protection Corporation (SIPC) insurance provided by Lloyd's of London. There is an aggregate loss limit of $1 billion.
- No significant breaches reported through Nov. 2019.
Merrill Edge is a good choice for long-term investors, especially those who already have a relationship with Bank of America. The Preferred Rewards program can offer great value for loans or for discounts on the management fee assessed by the robo-advisor, Merrill Edge Guided Investing. There are great resources for newcomers to investing and for those exploring various life stages.
The Story features are especially helpful for understanding what is going on in a client’s portfolio, or what is affecting the performance of a particular stock or fund. Merrill’s commitment to best execution and refusing payment for order flow from third party wholesalers allows the brokerage to pass savings on to their clients in the form of price improvements and overall execution quality. Going forward, the firm is focused on providing additional value now that commissions for equity trades are no longer a deciding factor for choosing a broker.
Although Merrill Edge is a good choice for the buy and hold crowd, active traders are less welcome by design. Derivatives traders, especially those who trade three- and four-legged options strategies as well as futures and futures options, will not be happy with the limitations of Merrill Edge's MarketPro platform. Although you can make the platforms work for more active trading, you would be fighting an unnecessary battle when there are better options out there.
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