My Bank of America Merrill Edge Online Investment Brokerage Account Review 2011
Merrill Edge Review
Merrill Edge is part of Bank of America investment division. Merrill Edge is one of emerging online brokerage site which offers financial service to investors or traders. As part of Merrill Lynch online trading, it also offers a platform to trade online stock for its investors either buy stocks, sell stocks or trade options. Merrill Edge also offers zero commission for qualified investors or traders. If you are not qualified for zero commission trading, you will need to pay only $8.95 per trade. Merrill Edge is able to offer a full range of banking through Bank of America, brokerage, and investment advisory services to their large client base. Other financial services include equity trading or stock trading, mutual fund trading, retirement planning, checking account and 529 college saving planning.
During 2008 financial crisis, Bank of America acquired wealth manager Merrill Lynch. The Bank of America's online trading website was soon after branded as Bank of America Online Investing, Powered by Merrill Lynch.
In 2010, all Bank of America investment accounts were moved to a new platform and re-branded as Merrill Edge. The following Merrill Edge review is only reviewing ME trading platform. Merrill Edge is well known due to its zero commission trading and its strong research tools by Merrill Lynch investment division.
Bank of America is a big publicly traded financial institution on the New York Stock Exchange with stock ticker BAC. Bank of America (BofA) currently has a market cap of $144 billion. The company is headquartered in Charlotte, North Carolina with Brian Moynihan as President and CEO and Charles O. Holliday as Chairman.
Products & Pricing
- Products: Stocks, fixed income or bonds, mutual funds, options, annuities, managed solution
- Market Orders: $8.95 per trade
- Limit Orders: $8.95 per trade
- ETF Orders: $8.95 per trade
- Auto Phone Orders: $32.50 per trade
- Broker-Assisted Orders: $75.00 per trade
- Mutual Funds: $0.00 for NTF funds with Short Term Redemption fee
- Options: $8.95/trade + $0.75/contract
- Fixed Incomes: Price & Yield as quoted.
- Minimum to Open: $2000 for Cash or Securities
- Account maintenance fee: $25.00 per quarter
- Some Other Fees: Wire Transfer Outgoing: $30.00 per transfer.
- ACAT Out: $95.00.
- Maximum Margin Rate: Based on proprietary base rate
Inside Merrill Edge AccountClick thumbnail to view full-size
Opening Merrill Edge Account
To open a Merrill Edge account is very easy and straight forward; customer needs to fill the online application through Merrill Edge website (www.MerrillEdge.com). You can open individual, joint, custodial, and Individual Retirement Accounts (IRA). They may require you to submit some identification as well. The application only takes about 5-15 minute. If you have a Bank of America online ID, you can use your Online ID and passcode to speed up the application process. The Online ID will verify your identity and will automatically fill your online application with your Bank of America Information. Once you are done, you’ll need to wait for their approval. Then, you can setup how you want to fund your account.
You will need to provide some additional information for any typical brokerage accounts such as:
- Name, Social Security Number and Date of birth
- A valid email address
- Employment information (Company Name & Start Date)
- General financial information such as annual income and household net worth
If you are a US resident, you will need to submit a copy of green card and passport front page to verify your resident status. You can fax this document after you received the email from Merrill Edge or mail this information. I faxed this information and within 2-3 hours my account is opened.
There are 4 different ways to fund your Merrill Edge account:
- Wire Transfer – usually can be done same business day
- Transfer an account from other brokers .This will take more than 10 business days
- Mailing a check will take 5 business days
- Electronic Transfer (ACH transfer) will take up to 3 business days.
Link to your Bank of America Deposit Account
If you have a Bank of America account, you will need to wait for 1-2 business day to get the link for connecting your Merrill Edge account and Bank of America account. The link will show up in your Merrill Edge main page. Once it is completed, you can schedule a transfer from your bank of America account (checking or saving) to your Merrill Edge account. It takes 2 business days for the fund to be available for trading.
Other Brokerages Review
Type of Account
There are 2 main category of investment accounts:
- Merrill Edge self-directed investing – Independent investor with specific research, tools and resources
- Merrill Edge Advisory Center – For Professional advice and advisory service by Merrill Lynch
Type of Investment accounts offered by Merrill Edge:
- Investment Accounts such as General Brokerage Investment Account (Individual or Joint account) and Custodial account (UGMA / UTMA).
- Retirement Accounts Solutions such as Roth IRA (Individual Retirement Account), Traditional IRA, 401(k) rollover and Annuities
- College Planning accounts such as 529 College Savings Plan, Coverdell ESA account, Custodial UGMA/UTMA accounts.
The following stock order types can be placed on Merrill Edge:
- Stop Loss
Zero Commissions online trades (up to 30 free trades / month)
One of the great features of Merrill Edge is its zero commission trades for online equity or ETF. To qualify for this up to 30 commission free equity or ETF trades per month, customer need to meet either one of the following conditions or criteria:
- Maintain total combined balances of $25,000 or more in your Bank of America deposit accounts (checking, savings, FDIC-insured CDs and FDIC-insured IRAs);
- Maintain total combined balances of $25,000 or more in cash balances in your Merrill Edge self-directed or Advisory Center accounts with the Bank Deposit Accounts sweep option with your Cash Management Account (CMA) or Retirement Assets Savings Program (RASP) sweep with your IRA.
Note: If you exceed the 30 trades limit during any calendar month, or if you don't qualify for $0 trades, your online equity commission per trade will be based on your eligible online equity commission rate such as standard, preferred, and superior.
Advantages & DisAdvantages
Pros of Merrill Edge
- Up to 30 free trades / month with $25,000 bank of America deposit account or cash balances in ME
- Access to Merrill Lynch research reports and various other research reports such as Morningstar and S&P 500
- Easy access to Bank of America deposit account
- Offer free checking
Cons of Merrill Edge
- There are no complex stock order as well as conditional order
- Limited NTF mutual fund
- No Forex and Future trades
- High maintenance fee for low balance account
- High ACAT fees
- No Mobile access
Other Customer Complaints from research:
- Website is not customer friendly and there is no CNBC TV
- One customer experience unauthorized trade performed by Merrill Edge advisor
- Lack of customer service
- Issue with trust conversion
- Issue with both simultaneously long and short trade
Fees & Commissions Schedule
For Stock Trades, there are three types of commission structure such as Standard, Preferred, and Superior. Investors or traders can buy or sell stocks online for $8.95 per trade (standard), $6.95 per trade (preferred), or $4.95 per trade (Superior). Orders placed through the automated telephone system will cost $32.95 per trade. For representative assisted orders, investor and trader will be charged $75 per trade (Standard) and $50 per trade (Preferred & Superior). You can also qualified for zero commission trades (up to 30 trades / month), please check the above information.
The actual commission has three tiers, depending on the total assets with the broker:
- Standard: $8.95 per trade for total combined balances in Merrill Lynch investment accounts and Bank of America NA deposit accounts up to $250,000, or execute 0 – 29 trades per quarter (0-119 per year)
- Preferred: $6.95 per trade for combined balances between $250,000 and $1 million, or execute 30+ trades per quarter (120+ per year)
- Superior: $4.95 per trade for balance above $1 million, or execute 60+ trades per quarter (240+ per year)
For Option Trades, Merrill Edge charges $8.95 per trade + $0.75 per contract (Standard), $6.95 per trade + $0.75 per contract (Preferred), or $4.95 per trade + $0.75 per contract (Superior). The cost of 1 contract will cost $9.70 commission fee for standard pricing, while 10 contracts of superior pricing will cost $12.45 commission fee.
For mutual funds trades, there are 6,400+ mutual funds available. Merrill Edge also offers 150 No load & No Transaction Fee (NTF) mutual funds. There is no charge if you buy the no load and no transaction fee fund, though there is Short-Term Redemption fee of 0.75% gross proceeds ($50 minimum & $250 maximum) if the fund was held less than 90 days in your Merrill Edge Self Directed account. There is no charge for Intra-family exchange. For load funds, please check for the load charges.
For Forex and Future trades, there is no support for both at the present time.
Merrill Edge SafePass Card
Merrill Edge also provides a SafePass Card for extra level protection when customer wants to purchase Over the counter bulletin board, pink sheet and other high-risk securities online. Customer or client may need to apply for this new PassCard. It’ll be sent within 10 business days. You will need to activate the card once you received this card. Once activated, you can purchase OTC, pink sheet and high risk stocks.
Note: This card has a smart chip with your name and card serial number printed in front of the card. There is black button which you can press to get a new SafePass code
For instance, when I try to purchase Kinross Gold Corp (Ticker: KGC), I’ll need a new security code from my SafePass card. Once I entered this code, I can place a market order or limit order for this stock.
Merrill Edge offers a standard web based trading platform. There is no desktop software application for traders. It also provides variety of incredible research tools for its customer to analyze stocks or etf or global market. It also has research report from Merrill Lynch, Morningstar, and S&P 500. Compare to free charts available online, the charts on ME for technical analysis is just average. Commissions and fees are only really great for those with $50,000+ in total assets including $25,000 cash balance. Margin rates are a bit too high and the DRIP program is not user friendly. Also, there is currently no mobile trading platform for iphone or Android phone.
I would only recommend Bank of America Merrill Edge brokerage account for high account balance customer especially with $50,000 account balance or more especially for stock trading. Smaller investor may need to find other brokerages to trade online such as lightspeed, Interactive Brokers, eOption, and more.
- ETF = Exchange Traded Funds
- Mutual Funds = Load Mutual Fund, No Load Mutual Funds, No Transaction Fee Mutual Funds
Disclosure: I have no affiliation with Merrill Edge other than I use it for trading. Please do your own research for additional details. All information is as updated as February 4, 2011. Please trade responsibly.