Vanguard has built its excellent reputation on mutual fund ownership since opening to the public in 1975 and is now the world’s top provider in this financial category. Merrill Edge has a much shorter public history, starting operations in 2010 following Merrill Lynch’s acquisition by Bank Of America. Both brokerages focus their marketing on higher net worth individuals, with relatively high fees deterring young investors, frequent traders, and smaller account holders.
Vanguard stuck to its roots for years, offering mutual funds, ETFs and long-term investments but no web or standalone interface for do-it-yourself customers. It now offers a rudimentary trading platform to handle basic orders, but the interface lacks the horsepower of traditional rivals that include Charles Schwab and TD Ameritrade. Despite Merrill’s conservative reputation, its MarketPro active trading platform offers robust features that complement a simpler web interface for low-frequency traders and investors.
In our 2019 Best Online Brokers Awards, Merrill Edge received an award for Best for Beginners, Best Stock Trading Apps, Best for Roth IRAs, Best for IRAs, and Best Web Trading Platforms.
Vanguard received an award for Best for ETFs.
- Account Minimums: $0
- Fees: $6.95 per stock trade. Options trades $6.95 per leg plus $0.75 per contract
- Account Minimum: $3,000 for most mutual funds
- Fees: $7/stock and ETF trade, $7 plus $1 per contract for options
- Best for: ETF investing
Merrill Edge presents step-by-step trading and investment guidance for self-directed customers through easy to navigate online and mobile interfaces. The Java-based MarketPro platform provides active traders with more sophisticated features, including market analysis and global research, as well as interactive charting, pattern recognition, and a fully customizable dashboard. Traders can build watch lists, access more than 70 studies, set alerts, and monitor their portfolios in real-time.
Vanguard actively discourages short-term trading, in keeping with their long-term philosophy, but now offers rudimentary online and mobile order entry interfaces for stocks and ETFs. There’s no standalone software for active traders and the web platform includes few technical analysis or charting features. In addition, order entry doesn’t include sophisticated stop or management capacity, adding considerable risk to open positions.
- Comprehensive suite of special features
- Integrate with your other Merrill or Bank of America accounts
- Site is easy to navigate
- Clean and straightforward
- Charting capabilities are fairly limited
- No technical analysis
News and Education
Merrill Edge offers full-featured resources that include economic and market data, news, and independent research. A variety of on-demand webinars by industry and company experts cover key financial topics. A dedicated educational section is arranged by experience level, with beginner, intermediate, and advanced tiers covering topics in personal finance, stocks, and options. The section also includes more detailed coverage of annuities, fixed income and mutual funds.
Vanguard’s News & Perspective section highlights macroeconomic and retirement planning but lacks comprehensive market commentary. An Investment & Commentary section features a variety of position papers but no timely research for planning and choosing investments. The Market Summary section includes intraday metrics and market movers while the weekly Vanguard Blog discusses general interest themes.
- Investor education through articles and an online classroom setting
- Skill-level specific resources ranging from beginner to advanced
- Focused on mutual funds and ETFs
- In-depth index investing
Merrill stock and ETF trades cost $6.95 while options cost $6.95 + 75 cents per contract, regardless of account balance or trade frequency. They also offer between 30 and 100 free trades per month for enrollees in Bank of America’s Preferred Rewards program, which requires a checking account balance that starts at $20,000. Vanguard charges nearly identical commissions, $7.00 for stocks and $7.00 + $1.00 per options contract for accounts up to $499,999. Commissions drop to $2.00 for accounts above $500,000 and to zero for limited trades between $1,000,000 and $5,000,000. Neither broker offers futures, commodities, or currencies.
Merrill offers a variety of commission-free mutual funds but no free ETF trading, unlike Vanguard and many competitors. Vanguard limits commission-free trading to 129 branded mutual funds and 56 ETFs, which is appealing because these funds carry a low 0.11% average expense ratio. However, there’s a catch: account holders get hit with a 60-day trading restriction after buying and selling ETFs more than 25 times in a 12-month period. Customers will also pay a $50 penalty for selling a mutual fund within two months of purchase. Merrill’s website states that mutual fund “redemption fees may apply,” but doesn’t specify costs.
- Stock trade fees: $6.95
- Account minimum: $0
- Stock trade fees: $7
- Account minimum: $0
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