Merrill Edge and Charles Schwab are two discount brokerage firms with advanced trading tools and a host of
other investment services. So which broker is the better: Charles Schwab vs Merrill Edge? The following contest will provide the answer.
Trading Costs and Account Minimums
Schwab and Merrill Edge customers pay $6.95 for ETF and stock transactions. Both firms also offer living, breathing representatives for investors who prefer to place a trade over the phone. Merrill Edge charges $29.95 for this service, while Schwab is a little higher at $33.95.
A trading account at either firm has no fees. This includes annual fees, maintenances fees, low-balances fees, and inactivity fees. Schwab does have an opening deposit requirement of at least $1,000. However, opening a Schwab checking account with the brokerage account will waive the requirement. Merrill Edge does not have a minimum opening deposit.
The victory in this category goes to Merrill Edge.
Investing in Mutual and Exchange-traded Funds
There are over 5,000 mutual funds available at Schwab. More than 3,500 are OneSource funds. These products have no load and no transaction fee. This list of no-load, no-transaction-fee funds is one of the largest in the industry. Schwab does charge a steep $76 for transaction-fee funds on the buy side. They are free to sell, however.
Merrill Edge offers 800 no-load, no-transaction-fee funds. The broker has a total of just under 5,000 mutual funds. If a mutual fund has a transaction fee, the price is $19.95, which is applied to sales, purchases, and exchanges. Another charge of $39.95 will be incurred if any NTF fund is sold in less than 90 days after purchase.
Investors interested in exchange-traded funds will not be disappointed with Schwab. The broker offers over 200 ETF's commission free. The expense ratios of these investments are all below 1.00%. Disappointingly, Merrill Edge doesn't offer any ETF's commission free.
Schwab wins here.
Research and Education
Schwab clients get independent equity reports at no cost. These come from several parties, such as Thomson Reuters, Morningstar, Vickers, and Ned Davis Research. The broker also provides Schwab Equity Ratings free of charge. This important analysis tool judges more than 3,000 stocks. Report cards covering mutual funds are also available at no cost. The broker's website has helpful videos and good-quality articles on a variety of financial topics.
The Merrill Edge website also has a good collection of educational tools. The broker maintains videos on issues such as volatility and asset allocation. Equity reports from Merrill Lynch, Morningstar, and S&P Capital IQ are available free of charge. Investors will also find tutorials and self-guided courses on the broker's website.
Schwab wins this category for offering stock reports from more than 3 providers.
Schwab clients can reach a customer service representative over the phone 24 hours a day, 7 days a week. Customer service in Chinese is also available, as is an on-line chat service. For customers who travel outside the U.S., the broker provides international phone numbers. For customers inside the U.S., Schwab operates more than 325 local offices.
Like Schwab, Merrill Edge maintains 24/7 customer service. However, the broker only has chat service for investors trying to open an account. The firm does offer a phone number for clients who travel internationally.
Merrill Edge fails here.
Investors at Merrill Edge get to use a nicely-designed website. Orders can be placed within the browser. There is also a useful trade ticket at the bottom of the browser called TradeBar. Trades can be placed directly from the bar, which is able to generate a small chart. The firm also offers its customers an advanced platform called MarketPro®. The trading system requires 15 trades every 3 months or assets of $50,000 or more across all Merrill Edge and Bank of America accounts.
The Schwab website is easy to navigate and user-friendly. A handy trade bar appears at the bottom of the web browser. News related to a particular stock and a handy chart can be displayed from the bar. Unfortunately, trades cannot be placed using the trade bar. Clicking on 'Trade' on the bar generates a trade ticket in the browser. Schwab also has a sophisticated platform called StreetSmart Edge. The software requires an account balance of at least $1,000 to use.
The Merrill Edge trade bar is better than Schwab's, although Schwab's policy on its advanced platform is better than Merrill's policy for its software. Overall, a tie here.
Traders at Schwab can buy and sell securities using Android and Apple phones and tablets, Kindle Fire, and mobile web. The broker also has a platform for Apple Watch. Important features include live streaming of CNBC, mobile check deposit, and bill pay.
Unlike Schwab, the Merrill Edge app doesn't have streaming business news. Bill pay and mobile check deposit are available, however. Trading takes place on Android, iPhone, iPad, and Apple Watch.
Schwab wins for its offering of CNBC news.
Merrill Edge vs Charles Schwab: Summary
Schwab won four categories, Merrill Edge (Merrill Edge review) was successful in just one category, and
there was one draw. Schwab (Charles Schwab review) easily wins. Despite the result, Merrill Edge is a
good broker for active equity traders. Value oriented clients have other options to consider besides these two companies.