Who is Better, Fidelity or Merrill Lynch?
Fidelity's commission for equity trades is $0, but Bank of America Merrill Lynch's subsidiary Merrill Edge charges $0, too. Let's take a
look at these two brokers and see which is better: Merrill Lynch or Fidelity?
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
|
|
Ally Invest
|
$0
|
$9.95
|
$0.50 per contract
|
$0
|
$0
|
Services
Promotions
Merrill Edge: Get up to $600 when you open new Merrill Edge account with at least $20,000.
Fidelity: Get 500 free trades with $100,000+ deposit.
Ally Invest:
Up to $3,500 cash bonus + $0 commission trades.
Research & Education
With Merrill Lynch backing it up, Merrill Edge is able to provide a lot of educational materials. The broker's website offers
several articles, webinars, tutorials, and videos on a variety of topics, including annuities, fixed-income products, mutual funds,
and options. Users can search by three experience levels: beginner, intermediate, and advanced. There is also plenty of market
information that covers both U.S. and foreign exchanges. Commentary from Merrill Lynch is available for download, as are stock
reports from S&P Capital IQ, Morningstar (premium membership discounts), and
Merrill Lynch. They are all free.
Fidelity customers also have a lot of informational resources. The firm's website has a plethora of instructional materials. Stock reports can be accessed at no cost from third parties, including Thomson Reuters, Ford Equity Research, Zacks, and several other analysts. Merrill only provides reports from three analysts.
There are many articles, webinars, and videos on the Fidelity website that discuss numerous investment topics. These include fixed-income trading, college planning, exchange-traded funds, how to buy and sell options, and more. Fidelity's website has a useful mutual fund screener, although it doesn't have as many criteria as the Merrill screener.
Pretty close in this category.
Managed Portfolios
With assistance from Merrill Lynch financial advisors, Merrill Edge recently launched Guided Investing. This is a low-cost managed account service that costs just 0.45% per year and requires a $5,000 starting balance. Guided Investing buys and sells only ETF's. It is not a robo-advisory system, because human advisors from Merrill Lynch are involved in managing the account. The broker also provides investment professionals at select Bank of America locations for 0.85%.
Fidelity customers have access to a robo-advisory service that invests in mutual funds and low-cost ETF's. Called Fidelity Go, the service costs 10 basis points less than Guided Investing and has the same opening deposit requirement. The broker also offers human advisors who buy and sell stocks. The service comes with a higher cost than Fidelity Go. Depending on account balance, it ranges from 0.40% to 1.7%, with minimum deposits varying from $50,000 to $2,000,000. Some of these accounts invest in fixed-income assets as well as stocks.
Fidelity wins the category for having both robo and human advisory options. (Ally Invest, however, is better priced and charges
0.0% for its Cash-Enhanced Managed Portfolio.)
Trading Technology
Merrill Edge has a great website. It is easy to use, thanks to handy menus at the top. A useful trade bar at the bottom of the screen can place orders for stocks, options, and ETF's. The tool can also display a small graph. Charting on the website has some useful features, including technical studies and drawing tools; although a chart cannot be displayed full screen. A desktop platform is available to active traders.
Fidelity also has desktop software for accounts that meet certain minimums. The broker's website can place orders for all types of securities, although it doesn't seem as nicely laid out as the Merrill site.
The Fidelity website has a trade ticket, too; but it is not as advanced as Merrill's. Charting on Fidelity's website is quite advanced with a large amount of customization. Comparisons can be made to other securities, and a chart can be displayed the width of the screen. The broker is one of the few in the industry to provide an app for Apple TV.
The broker's sophisticated website and trading ticket give Merrill Edge the nod here.
Mobile Platforms
Both brokers have a mobile app for tablets and phones plus a platform for Apple Watch. All of them are free to use. The Fidelity mobile app can be used on Windows Phone 8, which Merrill does not support. Fidelity's app has several important features, including bill pay and mobile check deposit. Bloomberg investment news streams in HD at no cost.
Unfortunately, the Merrill Edge app doesn't offer live business news. It does provide a lot of the same great features that Fidelity's has, such as funds transfer, charting, and a customer service contact.
Merrill Lynch's discount broker loses here.
Mutual and Exchange-traded Funds
Fidelity traders have access to about 11,000 mutual funds. Of these roughly 3,500 have no transaction fee, and about half of this group has no load. The broker charges $49.95 on the buy side of funds that carry a transaction fee. There are 84 ETF's at Fidelity that can be traded without paying any commissions.
Surprisingly, Merrill Lynch's on-line broker doesn't offer a lot of mutual funds. There are less than 4,000 products that are open to new traders. Funds with a transaction fee cost $19.95 on both the buy and sell side. Disappointingly, there are no commission-free ETF's at Merrill.
Fidelity is the victor here.
Fees, Commissions, and Account Minimums
Stock and ETF transactions at Merrill Edge are $0. Option contracts cost an additional 65ยข each. Using a live
agent over the phone to place an equity trade costs $29.95. There is no minimum to open an account, and there
are no account fees.
Fidelity requires at least $2,500 to open an account, although it doesn't charge any on-going fees. Options are the same price as Merrill, and using a live rep over the phone to submit an equity order is $32.95.
Fidelity Investments wins here again.
Promotions
Merrill Edge: Get up to $600 when you open new Merrill Edge account with at least $20,000.
Fidelity: Get 500 free trades with $100,000+ deposit.
Ally Invest:
Up to $3,500 cash bonus + $0 commission trades.
Fidelity vs Merrill Lynch: Results
Fidelity won four categories, Merrill Edge was successful once, and there was one draw.
Fidelity wins by wide margin. Value oriented investors can find a better deal at
Ally Invest.
|
|
|
- Stocks and ETFs: $0
- Stocks and ETFs broker assisted: $32.95
- Options: $0.65 per contract
- Mutual funds: $49.95 to buy; $0 to sell. $49.95 if sold within 2 months
- Bonds and CDs (new issues): on a net yield basis
- Bonds and CDs (secondary issues): $1.00 per bond ($250 maximum)
- Investment products: stocks, bonds, mutual funds, options, commercial paper, UITs, ETFs
- Fidelity minimum deposit to open account: $2,500 ($0 for Rollover IRA; $2,500 or $200 per month for ROTH and Traditional IRA)
|
- Stocks and ETFs: $0
- Stocks and ETFs broker assisted: $29.95
- Options: $0.65 per contract
- Mutual funds: $19.95
- Merrill Edge self-directed mutual funds: 0.75% gross proceeds, $50 minimum, $250 maximum
- Bonds: on a net yield basis
- Investment products: stocks, mutual funds, options, ETFs, bonds, CDs
- Merrill Edge minimum deposit to open account: $0
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