Merrill Edge Guided Investing isn’t actually a robo-advisor, but it certainly has the feel of one. While you get access to an online dashboard and constant monitoring of your accounts, your actual investment strategy is managed by human advisors. The downside is that you don’t actually get to talk to them for individualized advice unless you upgrade your plan. Merrill Edge is owned by Bank of America and offers ETFs and mutual funds spread out across asset classes for diverse investing.
How It Works
With no automated algorithm to create your portfolio strategy, Merrill Edge instead uses their Chief Investment Office team. Accounts are actively managed rather than only being rebalanced on a specific schedule, allowing for fast responses to changes in the market. Merrill Edge selects ETFs to fulfill specific asset allocations that are determined for your strategy.
How do you get started investing with Merrill Edge?
Begin by choosing Guided Investing (there’s also an option for self-directed investing). Then you’ll answer some questions online about yourself and your investment goals. From there, you’ll receive a recommended strategy and you can open your account and deposit funds.
Types of Accounts
You can choose from a selection of taxable brokerage accounts as well as tax-advantaged IRAs. Here’s what Merrill Edge Guided Investing offers.
You can choose from Individual, joint, or custodial brokerage accounts. Custodial account options include both UGMAs and UTMAs, depending on your needs. This is a wider selection of options compared to what you’ll find at some competitors.
Investing in an IRA is an advantageous way to save for retirement. Merrill Edge Guided Investing offers both traditional IRAs and Roth IRAs, both of which come with unique tax-saving opportunities. You can also rollover IRAs and 401ks from former employers, but there is currently no SEP-IRA available for self-employed investors.
Merrill Edge’s entry-level is higher than you’ll find with typical robo-advisors, but you do get that ongoing market review by real advisors. There’s also an additional level of service that adds a human advisor relationship, which requires an account balance minimum of $20,000 and a higher management fee of 0.85%.
For both of Merrill Edge’s Guided Investing plans, the average ETF expense ratio comes in between 0.06% and 0.10%.
Guided Investing with an Advisor
While it’s more expensive, Merrill Edge offers the ability to upgrade to Guided Investing with an advisor. It does come with that $20,000 minimum and a 0.85% management fee, but you get some significant extra benefits.
This new feature allows you to speak directly with a financial advisor and get personalized advice on your goals and investments. You can choose to meet with your advisor over the phone, through video conference, or even in-person at a financial center near you.
Another feature available through Merrill Edge Guided Investing is the Preferred Rewards program. The benefits are based on both your Merrill Edge investment accounts and any other accounts you hold with Bank of America. Once you reach the $20,000 deposit threshold, you receive a 0.05% discount on your investment management fee, which drops to 0.40%.
You can also qualify for discounts on other Merrill and Bank of America products, such as accessing a higher interest rate on your savings account and receiving mortgage and auto loan discounts.
In addition to offering 10 asset classes for portfolios, Merrill Edge also offers socially responsible portfolios through its Impact Investing option. The platform utilizes four approaches to impact investing, which include the following features:
- Socially Responsible: Lets you screen out practices that conflict with your morals or religious beliefs, such as tobacco, firearms, and/or alcohol.
- Sustainable: Includes companies that focus on positive environmental, social, and governance factors.
- Thematic: Target companies that focus on specific areas, such as green initiatives, gender equality, and healthcare.
- Social Impact: Invest in companies that use market-based solutions in areas like early childhood education and homelessness.
One of the biggest benefits of choosing Merrill Edge is that they’re highly ranked for the quality of their customer service. You can reach out online, over the phone, or even in person at a Bank of America branch. There are more than 2,500 locations across the country so it’s easy to get face-to-face assistance. Just know that this doesn’t include investment advice, rather technical support on any account-related issues.
While the standard Merrill Edge Guided Investing account doesn’t come with a consultation with a financial planner, you can take advantage of a large suite of online education and planning tools. From a personal retirement calculator to an IRA Selector Tool, there are tons of resources and calculators to explore to help you make smart decisions regarding your investments.
Another perk is that your account is actively managed, meaning your portfolio is rebalanced as needed. There’s also no partial account transfer fee, so you’re not penalized every time you want to withdraw funds from your investment account (other than early IRA withdrawals, of course).
Finally, while Merrill Edge’s management fee is slightly higher than their robo-advisor counterparts, their ETF expense ratios are actually on the low side. With weighted averages between 0.06% and 0.10%, you could potentially see savings on that side of your account, depending on the specific allocations you opt to include in your portfolio.
Obviously, the major red flag that comes with Merrill Edge Guided Investing is the higher management fee compared to most robo-advisors. You really need to weigh the additional features that you get with Merrill to determine if it feels like the right fit (and cost) for your investment strategy. If you feel more at ease knowing a real-life person is managing your account (even though you can’t tap them for advice), it may be worth the cost. But if you want a true robo-advisor experience, then Merrill Edge probably isn’t the right choice.
Another downside is the high fees associated with either a full account transfer or account closing. The cost is $49.95 for a standard Merrill Edge Guided Investing account. The fee then jumps to $95 if you enroll in and close the Guided Investing account with an advisor. Because these fees are so high, we don’t recommend just taking Merrill Edge for a test run. Really do your due diligence to make sure you plan to commit to it in the long run, otherwise, you’ll be stuck with one of those expensive fees.
Merrill Edge also doesn’t offer any automated tax-loss harvesting features. If that’s something that is attractive to you, consider a more traditional robo-advisor with that feature for your investment accounts. Finally, Merrill Edge Guided Investing doesn’t help with more advanced investment needs such as estate planning. For that, you may need to consult a Merrill wealth manager, which comes with a much higher pricing structure of 2.20% of assets under management (for accounts under $5 million).
Who It’s Best For
Merrill Edge Guided Investing is great for Bank of America customers because you can link all of your accounts under a single dashboard. It’s also easy to transfer funds between your various accounts. And once your collective deposits reach $20,000, you unlock an array of rewards and savings for multiple types of products and services — not just investing.
If you love having all of your finances under one roof, you may consider switching your banking and investing to B of A. Some robo-advisors do at least allow you to view different accounts in a single platform, but with Merrill Edge, you can actually manage all of your relevant accounts.
This investment option is also ideal for people who prefer a hands-off approach to investing while still having a personal touch of a real-life advisor when it comes to the oversight of your investment portfolio. Even though you don’t get a one-on-one consultation with a financial advisor when you open a regular account, that personal oversight is still there. It really comes down to personal preference: would you rather place your trust in people (with the potential for human error) or a robo-advisor (with the potential to miss out on nuances)?
The Bottom Line
Merrill Edge Guided Investing is a unique way to invest your money because it offers a blend of traditional investing tactics and modern tracking. It’s easy to get personalized recommendations simply by filling out an online questionnaire. From there, it’s you can simply sign off on your plan and start investing.
Even without access to in-person guidance, Merrill Edge offers plenty of online tools and resources to help you choose the best accounts for your goals. Plus, you have the flexibility to upgrade your account (and your service) as your balance and your needs grow.