Merrill Guided Investing Review 2021

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.

Updated on Wednesday, January 9, 2019

Merrill Edge joined the robo-advisor world relatively recently, launching Merrill Guided Investing in 2017. The service offers a hybrid approach: Like other robo-advisors, it uses exchange-traded funds (ETFs) to build clients’ portfolios, but it also uses human advisors to actively manage the portfolios, including monitoring and rebalancing positions. This approach likely leads to Merrill’s account management fee, which sits at the higher end of the industry average.
Bank of America Corp.
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The bottom line: Merrill Guided Investing offers a solid but not spectacular service.

  • Higher-than-average account management fee
  • Overseen by human advisors
  • No tax loss harvesting and limited account types

Who should consider Merrill Guided Investing

Merrill’s robo-advisor offering is a fine pick for any investor, especially those who may not feel so comfortable with the fully automated process that is typical with rivals. Investors who are not quite as cost-conscious will not feel the larger fee, and current Bank of America or Merrill Edge customers likely will enjoy the convenience of having all their accounts in one place, not least because assets in the robo-advisor count toward Bank of America’s Preferred Rewards program.

Merrill Guided Investing fees and features

Amount minimum to open account
  • $5000
Management fees
  • 0.45%
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $49.95 full account transfer fee
  • $0 partial account transfer fee
  • $0 inactivity fee
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • Rollover Roth IRA
Mobile appiOS, Android
Customer supportPhone, 24/7 live support, Chat, Email, 2,200 branch locations

Strengths of Merrill Guided Investing

  • Human advisors: Human advisors actively manage the portfolio, and that’s probably the biggest selling point for Merrill Guided Investing. This approach is atypical for many robo-advisors, where computer algorithms adjust and manage the portfolio based on preset criteria and processes. That means human advisors may change your portfolio’s allocations and reduce or take on more risk, depending on market conditions.

Because they’re managed by humans, Merrill’s portfolios are not rebalanced automatically, as is typical for most robo-advisors. Instead, Merrill advisors monitor each account and adjust the allocations back to the target allocation as needed.

  • Integrated with Preferred Rewards program: Establishing a robo-advisor account at Merrill can be especially beneficial for current clients of Bank of America or Merrill. That’s because any amounts count toward Bank of America’s Preferred Rewards program. Customers with more than $50,000 at the bank and/or brokerage receive 30 free trades per month, while $100,000 in assets earns clients 100 free trades each month. And that’s on top of other special perks, such as a bonus multiplier on credit card rewards. Unfortunately, the program doesn’t save you on the robo-advisor’s account management fee.

With a $5,000 minimum deposit to open a robo-advisor account, that goes a long way toward earning some free trades. It might be worth it for current Merrill or Bank of America customers to expand their relationship rather than go elsewhere.

  • Customer service: Clients of Merrill Guided Investing receive the customer support that all Merrill Edge clients receive, and it’s substantial. Here, Merrill earns a top score. Phone help is available 24 hours a day, so you can reach someone at any time. Merrill also offers chat and email support, if either of those options is more your style.

Drawbacks of Merrill Guided Investing

  • Account management fee: This is probably the biggest drawback of Merrill Guided Investing: the 0.45% account management fee. That’s well above what traditional robo-advisors such as Wealthfront and Betterment charge, which is typically 0.25%.

But even if you lump in the fact that Merrill offers a human advisor component, its fee is just a hair below the 0.50% fee charged by Ellevest’s premium offering, with dedicated financial advisors providing a range of advice and assistance — and cheaper still is Ellevest’s basic offering. Merrill’s Guided Investing fee also is well above the 0.30% charged by Vanguard Personal Advisor Services and the 0.28% at Schwab Intelligent Portfolios, both of which offer access to advisors as well.

Finally, it’s not clear that Merrill offers enough to warrant a higher management fee. Of course, this fee does not include the expenses charged by the ETFs in the portfolio, although Merrill uses low-cost funds, charging just 0.07% to 0.14% annually.

  • No tax loss harvesting: Again, clients could reasonably expect a higher level of service from a fund that charges a higher account fee than rivals. So it’s too bad that Merrill Guided Investing doesn’t offer tax loss harvesting to investors, especially since it’s a standard feature of many other robo-advisors, even at lower price points. Tax loss harvesting is a process in which losing positions are sold in order to reap a tax benefit this year, helping to offset other capital gains and reduce tax liability.
  • Limited accounts: The range of account types is quite limited with this robo-advisor, and that’s surprising given the virtually unlimited range of accounts offered by Merrill Edge itself. If you want anything other than an Individual taxable account or an IRA account (Traditional IRA, Roth IRA or Rollover IRA), then you’re out of luck.

Is Merrill Guided Investing safe?

No Merrill Guided Investing review would be complete without discussing how safe your money is. As part of Merrill Edge, which is owned by Bank of America (one of the largest banks in the United States), the Guided Investing product takes plenty of precautions with your money.

Merrill is part of the Federal Deposit Insurance Corporation (FDIC) and the Securities Investor Protection Corporation (SIPC). So in the event that the broker is unable to return clients’ assets, investors are protected up to $500,000, including $250,000 for cash only. That doesn’t mean your investments won’t lose money, though, because like everything in the market, they’re subject to risk.

Final thoughts

Merrill Guided Investing is a solid choice for investors, especially those investors who aren’t terribly cost-conscious. Lacking features that other brokers charge even less for, Merrill definitely is asking quite a bit for its service, but it could be an easier sell for current clients of Bank of America or Merrill Edge who might like the convenience of having all their accounts in a single place or have the additional assets to move up in the bank’s Preferred Rewards program.

More cost-conscious investors could investigate either Wealthfront or Betterment, each of which charges 0.25% for its basic service. Or if you’re looking to really go low-cost, have a look at Schwab Intelligent Portfolios, with a 0% annual account fee.

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