Who is Better, Fidelity or Merrill Lynch?
Merrill Edge and Fidelity Investments are powerhouses in the brokerage world. Make sure you
take a look at our research before choosing one over the other.
Commissions
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Fidelity
|
$0
|
$49.95
|
$0.65 per contract
|
$0
|
$0
|
|
Merrill Edge
|
$0
|
$19.99
|
$0.65 per contract
|
$0
|
$0
|
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
Services
Promotions
Merrill Edge: Get $0 stock commissions.
Fidelity: Get $0 stock commissions.
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
First, We Need to Look at Tradable Assets
With a Merrill Edge account, you’ll gain access to these financial products:
- Stocks on US exchanges
- Bonds
- Option contracts
- Exchange-traded, mutual, and closed-end funds
With a Fidelity brokerage account, you get all of the above assets plus annuities and life insurance. Moreover, Fidelity has a global trading service that can be appended to any investment account. It opens up over 20 international exchanges with lots of foreign stocks.
And these are just self-directed accounts. Both firms also offer portfolio management. Merrill Edge has a low-cost human-managed ETF package but no robo service. The annual fee is 45 basis points.
Over at Fidelity, we do find a robo service. It is 35 basis points annually and trades special Fidelity mutual funds with no expense ratios.
In addition to these low-cost alternatives, both companies have traditional in-person services. Thanks to its partnership with Bank of America, Merrill Edge has more physical locations, although Fidelity does have centers in most US states.
Winner: Fidelity
Second, Let’s Inspect Margin Trading
Margin can be enabled on a self-directed account at either brokerage firm in this comparison. Merrill Edge customers pay interest on this schedule:
|
Debit Balance
|
Margin Interest Rates
|
|
$250,000+
|
13.88%
|
|
$100,000 - $249,999
|
13.88%
|
|
$25,000 - $99,999
|
13.88%
|
|
under $25,000
|
13.88%
|
Fidelity has a slightly lengthier schedule:
|
Debit Balance
|
Margin Interest Rates
|
|
above $1,000,000
|
9.25%
|
|
$500,000 – $999,999
|
9.55%
|
|
$250,000 – $499,999
|
11.825%
|
|
$100,000 – $249,999
|
12.075%
|
|
$50,000 – $99,999
|
12.125%
|
|
$25,000 – $49,999
|
13.075%
|
|
$10,000 – $24,999
|
13.575%
|
|
$0 – $9,999
|
13.575%
|
Unfortunately, neither broker-dealer shows margin details for individual securities on their profiles.
Winner: Fidelity
Third, Let’s Examine Their Websites
When you get ready to trade, with or without margin, both companies have very good websites. On the Merrill Edge site, we found several tools worth mentioning, including:
- Charting with tools, including the ability to view a graph in OHLC format
- Option chains for calls and puts
- Trade ticket with eight order types
- Search bar in the upper portion of the screen to make searching for a ticker symbol easy
Fidelity’s website also has a search bar at the top that makes getting around its site quite easy. Of course, the top horizontal menu does a good job as well.
Charting on the Fidelity site exceeds Merrill by offering full-screen mode and more tools. The broker’s order form has the same number of order types, although there’s a second version—a simplified form.
Winner: Fidelity
Next, It’s Time for Desktop Software
Neither brokerage firm has stopped with its website. Both offer very good desktop platforms. Merrill Edge’s program requires the download of a file from its website in order to launch, which is a slight inconvenience. Nevertheless, the software has many good features, including:
- OptionsPlay, an advanced derivative platform
- Level II data
- Several technical analysis tools
- An economics calendar
- Mutual fund trading
- Advanced charting with 13 display styles
Fidelity’s desktop software doesn’t require any download from its website, the first major advantage. But it lags in other areas. For example, charting only comes with 7 display styles. Also, it’s not possible to trade mutual funds on the platform.
But we do like Fidelity’s desktop program for other reasons, including live streaming of Bloomberg and direct-access routing, neither of which will be found at Merrill Edge.
Winner: Toss up
Fifth, Let’s Have a Look at Their Mobile Apps
Fidelity customers get another great software platform with the broker’s mobile app. There are many useful tools on it, including an AI, a learning center, and a beta experience. This latter option is a simplified interface that loses a lot of features. The regular app has bill pay, market news, option chains, and other great features.
Merrill Edge has just one version of its app. Highlights include horizontal charting with tools, multiple order types, a mutual fund trade ticket, and educational resources. These are available on Fidelity’s app as well. One feature Merrill offers that Fidelity doesn’t is a FICO score.
Fidelity has software for iMessage and Apple Watch, nice tools that Merrill Edge hasn’t developed yet.
Winner: Fidelity
Sixth, It’s Security Research
Fidelity’s desktop platform and mobile app have their own security research tools, but we found the broker’s website to have the lion’s share of resources. Besides good screeners, asset profiles are very valuable. For Amazon, we found no less than 11 analyst reports, some of which have price targets. Profiles on the Fidelity site have lots of data points, including numbers on top competitors, ESG performance, fundamental and technical scores, and much more.
On Merrill Edge’s trading platforms, we found good information as well. Mutual funds have star ratings from both Morningstar and Lipper (Fidelity has star ratings only from Morningstar). Stock profiles, though, have fewer pdf reports compared to Fidelity. For Amazon, we found just 3. Trefis® price analysis and free research from Bank of America Securities are highlights, though.
Winner: Fidelity
Finally, Here Are Some Extra Services
Extended Hours: After-hours and pre-market trading are on tap at both investment firms in this contest. Fidelity’s early session is longer by 30 minutes.
DRIP Service: Free of cost at both Merrill Edge and Fidelity.
Banking Tools: Merrill Edge offers check writing and a Visa debit card. Moreover, it’s easy to link a Bank of America deposit account to a Merrill Edge brokerage account. Fidelity has its own lineup of banking products, including unlimited ATM fee refunds on its debit card.
Individual Retirement Accounts: IRAs are available at both brokerage houses. Fidelity has more IRA types than Merrill Edge. Plus, Merrill Edge has a $49.95 IRA closeout fee, which Fidelity doesn’t have.
Fractional Shares: Only available at Fidelity (for stocks and exchange-traded funds).
Initial Public Offerings: Once again, only available at Fidelity.
Periodic Mutual Fund Investing: Both Merrill Edge and Fidelity provide the ability to set up automatic mutual fund purchases.
Winner: Fidelity
Recommendations
Mutual Fund Trading: Fidelity offers more than 9,000 mutual funds. At Merrill Edge, that number is reduced to just over 3,000. Both firms do, however, have very good fund research tools. In fact, Merrill Edge has the better fund screener. Take your pick.
ETF & Stock Trading: Because Fidelity has partial-share trading and direct-access routing, we would lean towards it.
Beginners: A low-cost managed account with either firm will work. For self-directed trading, we like Fidelity’s branch locations and online learning library better.
Long-Term Investors and Retirement Savers: Both brokerage firms have good retirement tools on their websites. Merrill Edge doesn’t offer annuities, but Fidelity does, and this gives Fidelity the edge here, not Merrill. Plus, Merrill charges annual fees for its solo 401(k). Fidelity does not.
Small Accounts: For managed accounts, Fidelity has the lower minimum deposit requirement. For self-directed trading, neither broker has account minimums or trading requirements, although as already mentioned, Merrill Edge does have an IRA closeout fee. Plus, it has an account transfer fee, which Fidelity doesn’t have.
Best Brokers
Fidelity vs Merrill Lynch: Results
Merrill Edge doesn’t even have the better banking tools. Fidelity is it.
Anyone looking for the top-rated brokerage firm on the market
should go with Charles Schwab
or read Charles Schwab review.
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