Merrill Guided Investing and E*TRADE Core Portfolios are both relatively new to the robo-advisor space. The two services come by way of providers known in financial circles for other things. E*TRADE, of course, is a major online brokerage with a wealth of experience in digital finance. Merrill Guided Investing technically has a longer history with its name associated with Merrill Lynch, but the robo-advisory grew out of Bank of America’s 2008 acquisition of Merrill Lynch and subsequent creation of Merrill Edge as a discount brokerage unit. The similarities between Merrill Guided Investing and E*TRADE Core Portfolios are significant, but we’ll look at some key differences that will help you decide on which one is the best fit for your money.
- Account Minimum: $5,000
- Fee: 0.45% annually, of assets under management, assessed monthly
- Best all-around for investors with higher asset levels and more complex financial needs, including older investors saving for retirement
- Competitive for current Merrill clients as the service is best suited to investors wanting portfolio management to include Merrill’s in-house research
- Investors who need guidance can upgrade to a plan that includes access to financial advisors
- Account Minimum: $500
- Fee: 0.30%
- Best all-around for newer and younger investors who don’t need assistance with long-term goal planning
- The $500 minimum balance offers an attractive commitment level when coupled with the 0.30% management fee
- Ideal for current E*TRADE clients
Merrill Guided Investing has a comfortable edge over E*TRADE Core Portfolios in terms of goal setting.
Merrill Guided Investing requires answering a few questions and picking a goal while the portfolio is further customized after entering a birth date, goal amount, and the goal’s time horizon. New clients are also asked if they have accounts outside of Merrill that will also be used to attain the goal. Although Merrill Guided Investing is mostly focused on your retirement, you can define non-retirement goals that include college savings, large purchases, and general wealth building. However, there is no guidance for figuring out appropriate targets or time horizons for these goals.
E*TRADE Core Portfolios is not as goal-oriented as its major rivals, with the new client allocating a single pot of money to fund all goals. E*TRADE’s position is that clients believe goal diversification just muddies the waters and makes the financial experience more confusing. E*TRADE Core Portfolios do have access to E*TRADE’s extensive research and educational resources, including retirement calculators and other planning tools, but the functions are not built into the Core Portfolios experience. Given these omissions, Merrill Guided Investing does a better job integrating goal planning, tracking, and funding prompts to help investors stay on track.
Merrill Edge states that 75% or so of Guided Investing clients are saving for retirement so it makes sense that goal planning can include assets held in other financial accounts, including 401Ks and estimated Social Security income. The Merrill Edge website also features excellent life- and goal-planning tools that can be accessed by all clients.
The Guided Investing setup process for retirement portfolios asks about current annual income and suggests that at least 85% be replaced by other sources after retirement. New clients can tweak goals and add other accounts to make certain they’re realistic and on track. A one-time cash flow that includes inheritance or a bonus can also be built into the plan.
By contrast, E*TRADE’s Core Portfolios program provides few dedicated retirement planning tools, calculators, or “how-to” articles. As mentioned, however, all clients have access to the main website’s extensive research and educational offerings, including retirement calculators and other planning tools.
E*TRADE Core Portfolios offers a wider selection of accounts than Merrill Guided Investing does with its retirement focus.
E*TRADE Core Portfolios account types:
- Individual taxable accounts
- Joint taxable accounts
- Traditional IRA accounts
- Roth IRA accounts
- SEP retirement accounts
- Custodial accounts
Merrill Guided Investing account types:
- Individual taxable accounts
- Traditional IRA accounts
- Roth IRA accounts
Features and Accessibility
E*TRADE Core Portfolios and Merrill Guided Investing are evenly matched in terms of features and accessibility, so it mostly comes down to what you actually intend to use.
Merrill Guided Investing:
- Access to financial advisors: Clients can speak with financial advisors if they pay a hefty 0.85% management fee and maintain a $20,000 balance.
- Premium rewards: Program clients qualify more quickly for Merrill premium rewards that include management fee discounts, free trades, and lower interest rates on loans.
- No joint accounts: There’s no support for joint accounts, forcing married and partnered applicants to seek alternatives.
E*TRADE Core Portfolios:
- Access to financial advisors: Clients must hold at least $25,000 in managed assets and pay fees between 0.65% and 0.90% to speak with financial advisors by phone or at branch offices.
- Socially responsible portfolios: Clients can select portfolios filtered through sustainability and corporate governance filters.
- Low minimum balance: The $500 minimum lets smaller and younger investors review the program with limited risk.
Both brokers offer dedicated and full-featured mobile apps for iOS and Android.
E*TRADE Core Portfolios has the edge in terms of fees overall, but Merrill Guided Investing gets more affordable as your assets held with them grow.
E*TRADE Core Portfolios charges a competitive 0.30% annual management fee with a $500 minimum deposit, rising to a $25,000 minimum and management fees between 0.65% and 0.90% to speak with financial advisors. The program generates ETF expense fees that average between 0.07% and 0.08% while socially responsible and smart beta ETF fees average 0.25%.
Merrill Guided Investing charges 0.45% of assets under management and a $5,000 minimum deposit, rising to 0.85% and a $20,000 minimum to speak with financial advisors. The rewards program for clients holding at least $20,000 to $50,000 in assets at the brokerage accesses a basic 0.05% discount that rises to 0.15% in larger accounts, bringing the annual fee down to a more competitive 0.30%. Merrill does not disclose average ETF expenses. ETFs sales are subject to a transaction fee of between $0.01 and $0.03 per $1,000 of principal.
E*TRADE Core Portfolios requires less capital to get started than Merrill Guided Investing. E*TRADE Core Portfolios' very reasonable minimum deposit of $500 is ten times less than a Merrill Guided Investing client needs to get started.
- E*TRADE: $500
- Merrill Edge: $5,000
E*TRADE Core Portfolios track Modern Portfolio Theory (MPT) principles, offering diversification while balancing risks and returns. Algorithms take over the heavy lifting after the strategy team populates initial portfolios, shifting into more conservative assets as the investment horizon draws closer. Accounts are rebalanced semi-annually or whenever free cash exceeds the 4% target threshold, higher than most rivals. Free cash is tapped first when withdrawals are requested, followed by other investments in a process that maintains targeted asset allocations.
Merrill Guided Investing offers 15 investment strategies that align with the firm’s research and insights. Strategies cover many market approaches, with the majority following classic MPT principles. There’s no set schedule for rebalancing, which is triggered by unspecified conditions in the capital markets as well as current risks and opportunities. Rebalancing may also be triggered due to contributions, withdrawals, or other asset flows into or out of the account.
E*TRADE Core Portfolios populates portfolios with ETFs from iShares, Vanguard, and JPMorgan. Merrill Guided Investing buys ETFs from Vanguard, Schwab, iShares, and State Street Global Advisors, while TIAA CREF mutual funds are purchased for 'social impact' fixed income exposure.
Neither Merrill Edge Guided Investing nor E*TRADE Core Portfolios provides tax-loss harvesting services, unlike major rivals. The Core Portfolios program does display an estimate of potential tax liability when the client requests a withdrawal.
The security used by E*TRADE Core Portfolios and Merrill Guided Investing is efficient and nearly identical. Both firms utilize heavy-duty 256-bit SSL encryption. Moreover, client funds are held in-house at both brokerages, providing Securities Investor Protection Corporation (SIPC) and private excess insurance. State-of-the-art fingerprint, face recognition, and two-factor authentication capability are available in mobile apps at both advisories.
E*TRADE Core Portfolios holds a slight edge over Merrill Guided Investing when it comes to customer service.
E*TRADE Core Portfolios clients can contact customer service 24/7 through live chat. Telephone service hours listed from 8:30 a.m. to 8:30 p.m. Eastern time, Monday through Friday. Customer service representatives were knowledgeable but it took an average of nearly 7 minutes on hold to speak with a representative. Qualified clients can talk to financial advisors by phone or walk into a brick-and-mortar location. FAQs are incomplete and would greatly benefit if questions were organized by topic.
Merrill Guided Investing offers online chat to prospective but not existing clients, in an odd omission. Telephone support is available 24/7 but varies widely in quality. For example, a morning call received knowledgeable assistance quickly while an evening call was answered after a long delay by an agent who was not helpful.
Merrill Guided Investing and E*TRADE Core Portfolios are both solid robo-advisors in terms of populating and managing a portfolio. In fact, they were evenly matched across our rankings, with both scoring among the top in user experience, education, and security. Merrill Guided Investing scored higher in terms of portfolio management and goal planning, but E*TRADE Core Portfolios had a similar lead in terms of account set-up and customer service. Although Merrill Guided Investing scored slightly higher overall, picking between these two is so close that it will have to come down to your exact preferences in areas like goal setting, account setup, and minimum deposit amounts.
With two closely matched offerings, it is no surprise that they share a similar weakness. Both Merrill Guided Investing and E*TRADE Core Portfolios are extensions of the existing businesses offerings, and they suffer a bit from not being the sole area of focus. This can be seen in the lack of some core features like tax-loss harvesting as well as a dependence on resources from other parts of the business (although these are admittedly excellent). Investors already affiliated with one or the other will no doubt overlook missing features for the convenience of an automatically managed portfolio with a service they already trust. If you are not affiliated, however, it may be worth broadening your search to include a few of the pure robo-advisor platforms for comparison.
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