Is Merrill Edge a Scam

Is Merrill Edge a Safe and Legitimate Company? Is it a Scam? Merrill Edge BBB Rating and Complaints for 2024


Is Merrill Edge Safe?


Are you concerned about the safety of Merrill Edge? Do you have questions about its legitimacy? If so, you’re on the right web page. We have conducted all the necessary research, and we have several answers for you.


Is Merrill Edge a Scam?


Merrill Edge is based in the United States and is therefore overseen by several American securities regulators. Up first is the Securities and Exchange Commission (SEC). Merrill’s SEC registration number is 8-7221 for its brokerage operations. Its SEC number for investment-advisory services is 801-14235. Because these two registrations cover Merrill Lynch operations, and because these go back many years before the investment firm was acquired by Bank of America, there’s a lot of history in both registrations.


Is Merrill Edge a scam?


Besides SEC oversight, Merrill Edge is also regulated by FINRA, the Financial Industry Regulatory Authority. This adds a second layer of protection for Merrill Edge customers. Merrill’s FINRA registration number is 7691. Once again, the history of this registration goes back many decades (to 1959 to be exact), so there’s a lot of information on Merrill Edge’s BrokerCheck profile. There are currently 1,466 disclosures on the profile, which really isn’t that bad given the length of history and the fact that Merrill Lynch operations are included.


Clearing Firm


Merrill Edge is self-clearing, which means the brokerage firm uses an in-house company for clearing operations. This is Merrill Lynch Professional Clearing Corp. It has its own SEC and FINRA registrations. They are 8-33359 and 16139, respectively.

The clearing arm of Merrill Edge has been in business since 1985. Its operations are overseen by both regulators just as the other functions of Merrill are. There are far fewer regulatory actions on the clearing firm’s BrokerCheck profile (just 56).


Is Merrill Edge FDIC/SIPC Insured?


In addition to the regulatory framework surrounding Merrill Edge, there is one more safeguard: insurance. Every brokerage account at Merrill Edge is eligible for SIPC insurance. The exact amount can depend on a variety of factors, although generally speaking, each customer (not each account) is eligible for $500,000 of insurance, half of which can be applied to cash balances. To be eligible for this cash protection, a Merrill Edge account must request SIPC coverage because the default setup at the brokerage firm is an FDIC-sweep program. Normally, uninvested cash is swept into program banks (these are Bank of America banks) that receive FDIC coverage. Note that FDIC coverage is only valid on uninvested cash that has been swept into program banks.


Is Merrill Edge SIPC Insured?


Merrill Edge has an auxiliary policy through Lloyd’s of London that kicks in after SIPC coverage has been exhausted. This supplementary policy covers both cash and securities. There is an account limit of $1.9 million on cash claims, and there is a total brokerage house limit of $1 billion.


Merrill Edge Better Business Bureau


The Better Business Bureau is a private, nonprofit corporation that tracks the performances and customer relations of many businesses operating in North America.


Merrill Edge BBB


Both Merrill Edge and its parent company Bank of America have profiles on BBB’s website. The profile for Merrill Edge shows a grade of A+. This is the highest possible rating. BBB’s grade is based on a variety of performance metrics, including the time the organization has been in operation, the number of complaints filed with BBB, how transparent BBB views the business, and more.

Merrill Edge’s BBB profile shows over 7,000 complaints that have been closed in the past 3 years. These include complaints filed against Bank of America. Examples of complaints include identity theft and Bank of America refusing to close an account.

Merrill Edge has 640 customer reviews on its BBB profile. The average customer rating is 1.06 out of 5. Although this is rather low, most of these reviews are from upset customers on the BBB site.


Top Rated Brokers





Is Merrill Edge Safe Verdict


Coupled with Merrill Lynch, Merrill Edge has a good track record in the brokerage industry. Its parent company Bank of America is one of the largest banks in the world with trillions of dollars in client assets. Combined with several layers of protections, we can conclude that this brokerage firm is a legitimate and trustworthy operation. Remember, however, that securities investing always involves risks, and this means that no brokerage firm is ever completely safe.


Open Merrill Edge Account



Visit Merrill Edge Website


Merrill Edge Review


Having confirmed that Merrill Edge is fully legitimate, let’s now turn to the exact details on what it offers—and what it does not.


Investments Choices


Merrill Edge Investments Rating

At Merrill Edge, investors can open managed accounts, self-directed accounts, or both. The unusual thing about this setup is that Merrill doesn’t have a robo service. All managed accounts are human-managed, although they are not completely old-school because they are online-only. The cost is 0.45%. It’s possible to attach a dedicated financial advisor to the service for an additional 0.40%. Either system trades a small selection of low-cost ETFs.

A larger selection of tradable assets can be accessed inside a self-directed account. These instruments include:

  • Full range of ETFs on the U.S. exchanges
  • Mutual funds
  • Closed-end funds
  • Stocks (including penny and OTC equities)
  • Options
  • Bonds and other fixed-income vehicles

Assets that are missing in action at Merrill Edge include futures, forex, precious metals, and (most notably) cryptocurrencies.


Website


Merrill Edge Investming Rating

Merrill Edge clients get a well-designed website with several tools for security research and order entry. An asset’s profile has links for comparisons, alerts, and a watchlist. The trade ticket has 8 trade types but only 2 duration choices.


Merrill Edge review: website


Charts are mediocre with no full-screen mode and a few technical indicators. There are 6 plot styles, though, with dot being the most unusual.

A more advanced trading experience will be found by launching MarketPro. This is a browser-based platform that was formerly a desktop program. The browser version has many, but not all, of the features the desktop software had. These widgets include a Level II window, sophisticated options tools, and advanced charting tools. Mutual funds can be traded on the platform, too, which is an added convenience.

MarketPro also delivers free use of Recognia, an advanced technical analysis platform. Security research from Bank of America Securities is available through MarketPro as well.

The one feature missing on MarketPro that we hoped to find is direct-access routing.


Other Software


Merrill Edge Trading Rating

As already mentioned, Merrill Edge’s desktop software has been retired and is no longer available. The brokerage firm does have a mobile app, though.


Is Merrill Edge Safe?


On its dashboard, the app presents lots of tiles with various themes. There are resources on retirement, opening another account, spending & budgeting, a watchlist, order status, and more.

Charts on the Merrill app have up to 20 years of price history and can be rotated horizontally. There are 4 graph styles and several technical studies.

There are two order tickets on the app: a regular ticket and a quick trade form. Despite the difference in names, they actually have the same features, and these are simply borrowed from the website ticket we have already seen.

In addition to the trading tools, Merrill Edge’s app has bill pay, security research tools, and mobile check deposit.


Customer Support


Merrill Edge Customer Rating

The Merrill Edge site has a pretty good self-help section. It’s located under the Help & Settings tab in the top menu. There are links to download forms, update a user ID, establish account alerts, and more.

Although the site does sometimes have a chat widget outside, there isn’t one inside (after logging in). Apparently, the chat service is designed for guests who may be considering opening an account.

For both customers and guests, Merrill Edge has agents on the phone around the clock. This phone service includes technical support, which is a nice perk. However, Merrill Edge has no branch locations. There are financial advisors at some Bank of America locations, although they only provide support to wealth management customers.


Self-Directed Fee Schedule


Merrill Edge Self-Directed Rating

Like most other brokerage firms nowadays, Merrill Edge charges no commissions for online trades of U.S.-listed stocks and ETFs. While this is a very generous policy, other activities may have fees in some situations.

For example, mutual funds not found on Merrill Edge’s list of no-transaction-fee funds cost $19.95 per side. The broker also has a short-term redemption fee of $39.95 for sales of NTF funds in less than 90 days after purchase. Placing a mutual fund trade over the phone costs an extra $10.

Option trades placed online are 65¢ per contract, per side. Assignments and exercises of contracts have no fees. Using a human broker over the phone for help in placing a trade (whether for options or stocks) is an additional $29.95.

Merrill Edge charges $49.95 to close an IRA.


Margin Service


Merrill Edge Margin Rating

A taxable brokerage account at Merrill Edge can be classified as either a cash or margin account. An IRA can be margin-enabled, which allows for day trading.

Merrill Edge no longer publishes its margin rates. Instead, it says on its website that ”rates are determined by a few factors.” Customers are supposed to call in to find out what they qualify for.

A cash account can upgrade to margin status on Merrill’s site. The link to do this is under the Trade tab on the website.


Open Merrill Edge Account



Visit Merrill Edge Website


Security Research


Merrill Edge Research Rating

Traders who need to do some investigating before choosing something to buy or sell will find some good tools on the Merrill site. There are screeners for options, mutual funds, ETFs, bonds, and stocks.

Asset profiles have plenty of data points on them. Mutual fund profiles deliver ratings from both Lipper and Morningstar. Distribution history is shown for a fund along with top 10 holdings.

Stocks have ratings from CFRA, Bank of America Securities, and Morningstar. There are pdf reports that can be downloaded at no charge, which is a great service.


Merrill Edge review: options


Then there are the option tools. A strategy builder can come up with multiple spreads for an underlying security. And an options screener can sweep through thousands of contracts based on a large number of variables.


Additional Services


Merrill Edge Broker Rating

Initial Public Offerings: Unfortunately, IPO trading is not possible with a Merrill Edge account.

Extended Hours Trading: Merrill Edge clients can place trades before the market opens and after it closes.

DRIP Availability: Merrill Edge has a free Dividend Reinvestment Plan.

Fractional Shares: Merrill Edge still offers whole-share trading only in stocks and ETFs.

Cash Management Features: Checks and a debit card can be attached to a brokerage account at Merrill Edge. There are no fees to do this, although Merrill does charge international fees for using the debit card overseas. It’s also possible to link a Bank of America account to a Merrill Edge securities account (this is done automatically for accounts with the same tax ID number).

Recurring Mutual Fund Purchases: It’s possible to establish systematic purchases of mutual fund positions inside a self-directed Merrill Edge account.

Individual Retirement Accounts: Merrill Edge has several IRA types. These include Roth, traditional, SIMPLE, SEP, Inherited, and Rollover. An FDIC-insured IRA from Bank of America can be linked to a Merrill account.


Recommendations


Retirement Savers and Long-Term Investors: Because IRAs have closeout fees, and because self-employed 401k accounts have multiple fees, it’s hard to defend Merrill Edge here. We suggest Fidelity, who has eliminated such fees.

Beginners: A managed account with Merrill Edge would be a very good start. The more expensive plan with a financial advisor would be even better.

Small Accounts: There is a $1,000 minimum deposit requirement for the managed account program ($20,000 for a dedicated financial advisor). We recommend a self-directed account, which has no minimum. Merrill might close an account with a $0 balance.

Mutual Funds: Merrill Edge has a grand total of 2,656 mutual funds as verified by its fund screener. This is a rather small list by industry standards. We recommend Firstrade instead, who has over 16,000 funds.

ETF and Stock Trading: Without an advanced desktop platform and without fractional-share trading, it’s hard to suggest Merrill Edge. Interactive Brokers would be better.


Merrill Edge Review Judgement


Yes, Merrill Edge is a safe brokerage firm. But that doesn’t mean it performs well in all categories. In fact, it appears to falter in several.


Open Merrill Edge Account



Visit Merrill Edge Website


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.