Merrill Guided Investing review 2023
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Merrill Guided Investing: Best for
- Bank of America customers
- Customer service
- Human advisors
Merrill Guided Investing distinguishes itself from robo-advisor rivals by using a team of human professionals to handle investment decisions, though to clients that difference will likely feel moot. The service offers the core investment management function but does so without a lot of frills offered by the top players in the space. Still, it does offer access to human advisors for an extra fee, something that is not always standard in the space. Merrill’s service offers yet another reason for customers of its parent, Bank of America, to keep their business under one roof, especially if they can take advantage of discounts on its higher-than-standard management fee.
Other robo rivals offer a greater selection of features at a lower price point, including Wealthfront and Schwab Intelligent Portfolios, though you won’t get access to human advisors in the latter unless you pay a monthly fee. Or if you want to keep your financial business with one provider, many other big banks and institutions also offer credible robo-advisors, often at a lower cost.
Merrill Guided Investing: In the details
Pros: Where Merrill Guided Investing stands out
Two service tiers
Merrill Guided Investing offers two service tiers, and they’re differentiated mainly by the help of an advisor:
- Online: The core plan gets you all the basics of the service, with portfolio management and other features.
- Online with an advisor: This tier ups the game with access to a financial advisor, who can help you establish your financial goals or provide more personalized service.
The core program has a $1,000 account minimum, while the advisor-assisted program requires a $20,000 minimum. The prices are similarly tiered as well: 0.45 percent annually for the core online plan and 0.85 percent for the online plan with an advisor.
With this structure, Merrill addresses one of the key pain points for many investors – the need for a human financial advisor to help with an investing world that many see as fraught with risk. That option is not available at all robo-advisors, but it’s often available as a service upgrade at many, such as Betterment or Schwab Intelligent Portfolios. SoFi Automated Investing and Wells Fargo Intuitive Investor both provide the option of speaking with advisors for no additional cost.
Active management – not passive
Merrill doesn’t want you to call Guided Investing a robo-advisor. But at some level it still is, even if it uses more of a hybrid approach, especially if you opt for the online program with an advisor. Merrill wants to distinguish its human-driven approach from the computer-driven approach of other robo-advisors, as if the latter approach weren’t created and managed by humans as well.
The company says that its portfolios are managed by “Merrill investment professionals who use a disciplined approach to asset allocation, portfolio construction and investment selection.”
But the real difference between Merrill’s offering and other robos is that Merrill manages the portfolio actively – and frankly, it’s not clear if that’s a good thing. Plenty of research has shown that active portfolio management tends to underperform more passive investing approaches.
Merrill’s chief investment office develops the investing strategies and which ETFs or mutual funds will be used in portfolios and in what allocations. They’ll also make adjustments to the portfolio as the market moves, with the intent of reducing risk and optimizing returns.
An active approach is usually more expensive than passive investing because it has to build in the costs of the investment pros in managing the portfolio. And Merrill is pricier (more below).
Integration with Bank of America
One of the top features of Merrill’s robo-advisor offering is the fact that it’s integrated with Bank of America. The ability to do it all with one institution will no doubt appeal to many customers who might otherwise be tempted to go with a rival.
It’s also a benefit if you participate in the bank’s preferred rewards program, which gives you perks for keeping more of your money at the bank. One notable feature of the program is extra credit-card rewards, a perk that can make the bank’s credit cards among the industry’s best.
If you’re a member of the program you can receive discounts of 0.05 percent, 0.10 percent, or 0.15 percent off the program fees, depending on how much you have across your Bank of America accounts. The lowest tier begins with $20,000 average daily assets and ranges up to $50,000. So at the lowest tier, your management fee drops from 0.45 percent to 0.40 percent. With the highest discount (for accounts with more than $100,000), your fee would fall from 0.45 to 0.30 percent, a significant discount.
Portfolios and fund expenses
Portfolios are constructed into two broad strategies, which you can select before you finalize your sign-up:
- Market-tracking: This portfolio tries to track the indexes using passively managed ETFs
- Sustainability focused: This portfolio incorporates ETFs that are invested in more socially friendly companies
After you run through Merrill’s assessment of your time horizon (when you need the money), what goal you’re investing for and your risk tolerance, the service will present you with one of these two portfolio types. Regardless of your answers to these questions, you’ll have these same portfolio strategies, but your answers will affect the allocations within each strategy.
For example, if you’re focused more on the short term or are less risk tolerant, your portfolios will be more focused on bonds and less on stocks. Investors with a long-term horizon or who are more risk tolerant will have portfolios with greater allocations to stocks and less to bonds.
Merrill uses 15 ETFs to build these two strategies, and these ETFs are generally low-cost. The market-tracking portfolio has an expense ratio of 0.07 to 0.09 percent, or a cost of $7 to $9 per year for every $10,000 invested. The sustainability portfolio is a bit pricier, with fees that range from 0.13 to 0.18 percent, or $13 to $18 annually for every $10,000 invested.
Merrill’s market-tracking strategy is about as cheap as you can find, and you’ll pay fees to the ETF managers regardless of which robo-advisor you go with.
It’s hard to argue with Merrill’s customer service hours, and you can access someone at any hour, one of the highlights of the Merrill Edge brokerage experience, too. Of course, you’ll have access to your online account at any time, if you just want to check on your performance, allocations or something else.
Befitting Merrill’s heritage as a full-service broker, Merrill’s robo-advisor offering gives customers a range of account types, among the most in the sector. So you’ll find virtually all major account types here, including some that are missed by others:
- Individual taxable accounts
- Joint taxable accounts
- IRA – traditional, Roth and rollover
- Custodial accounts
- SEP IRA
- SIMPLE IRA
It’s also great news if you’re already a customer at Bank of America because you can add a robo account a little more quickly and have your financial accounts all in one place.
Cons: Where Merrill Guided Investing could improve
Whether you’re going for Merrill’s online service (0.45 percent of assets annually) or its online service with an advisor (0.85 percent), you’re paying toward the top of the robo-advisor market. That would mean for every $10,000 you have invested here, you’d pay about $45 annually with basic service or $85 annually with the premium tier. It’s worth noting that Merrill charges the fee on a monthly basis, but you’ll pay at the annualized rate for whichever service tier you’re using. So for that same $10,000 balance, you’d pay $3.75 or $7.08 a month, depending on the tier. And to be clear, this fee comes on top of the fund fees, so the real total cost is a bit higher.
Merrill’s basic service should be compared to the entry-level services of rivals, whether that’s Betterment or Wealthfront or some other player. These two peers charge 0.25 percent annually for their service, or about $25 annually. So they’re significantly cheaper in percentage terms. And if you go with Betterment’s premium tier (which requires a $100,000 minimum), you’ll pay 0.4 percent annually while enjoying unlimited access to human advisors.
So Merrill is on the higher end of the market, and that doesn’t include robo-advisors that charge a flat monthly fee (such as Ellevest) or nothing at all (SoFi Automated Investing or Schwab Intelligent Portfolios.) Even if you factor in its preferred rewards perks, Merrill is still at least a bit higher than most of the field, when it probably should be lower cost for the plan’s members.
Merrill doesn’t offer a lot in the way of tools for its Guided Investing program, whereas it offers a lot in its Merrill Edge brokerage. But Guided Investing has basic goal planning, so you can identify a specific objective for your plan (retirement, a large purchase or something else) and a basic goal tracker.
Where Merrill does provide some extra value is in its educational content, with weekly explainers on the markets and economy and other educational pieces on ETFs, estate planning and more.
One of the downsides of the human-first approach at Merrill Guided Investing is the lack of a tax-loss harvesting strategy. This strategy uses a computer algorithm to sell losing investments in order to generate a tax break and then re-invest in similar assets. It’s one benefit to using an AI-driven approach, given the complexity and tedious nature of the process.
At a few other robo-advisors, such as Betterment and Wealthfront, tax-loss harvesting is a key feature, and both use research to show that the strategy drives real improvements in returns.
Besides this premium feature, it’s not clear if Merrill offers other tax minimization strategies, a regrettable hole in the service on offer here.
Betterment5.0 Bankrate Score
Betterment offers a high level of service and features across every aspect of its robo-advisor, from its core investment management to low-cost funds to premium features such as tax-loss harvesting. You can also upgrade your service if you need unlimited access to human advisors, and get access to a feature-rich cash management account, too.
Axos Invest3.0 Bankrate Score
Axos Managed Portfolios offers a strong robo-advisor service with some premium features, all at a reasonable price. Clients also receive a wide choice of funds, including socially responsible funds, though the associated cash management account forces clients to jump through some hoops to receive what is only a mediocre interest rate.
Interactive Advisors4.5 Bankrate Score
Interactive Advisors has upped its game this year, with new features such as tax-loss harvesting that put it among the top robo-advisors. That’s on top of one of the widest range of investing choices, low-cost funds and low overall fees. As strong as all these features are, though, the robo-advisor doesn’t offer access to human advisors, not unusual among robo-advisors.
SigFig3.0 Bankrate Score
SigFig keeps costs low whether it’s account fees, fund fees or the annual management fee. You’ll also get access to human advisors and benefit from automatic rebalancing and tax-loss harvesting. But the lack of a cash management account and relatively high account minimums may cause some investors to look elsewhere.
E-Trade Core Portfolios3.5 Bankrate Score
E-Trade Core Portfolios offers a capable robo-advisor, one that may work best for customers looking to keep their accounts with the broker while having someone do the investing for them. Clients will get low-cost funds as well as less-common choices such as socially responsible funds, though the service doesn’t offer tax-loss harvesting or many tools.
Titan Invest3.0 Bankrate Score
Titan offers something unusual in the robo-advisor space: Titan combines its own actively managed investments with passively managed ETFs, something no other major robo-advisor does. It also hedges those portfolios, does not charge a management fee for the passive funds – a rarity among rivals – and has a low minimum, making it easy to get started.
Morgan Stanley Access Investing3.5 Bankrate Score
For younger investors looking to invest based on their values or certain themes, Morgan Stanley’s Access Investing provides a suitable option among robo-advisors. Investors can choose between impact portfolios that focus on environmental, social and corporate governance (ESG) issues, market-tracking portfolios that minimize fees and performance-based portfolios that attempt to outperform through active management.
J.P. Morgan Automated Investing3.0 Bankrate Score
J.P. Morgan Automated Investing provides portfolio management services with automatic rebalancing and may be a good fit for existing J.P. Morgan customers. But you’ll also pay above-average management fees and have limited account types to choose from. There’s also no tax strategy included in the offering.
Vanguard Digital Advisor3.0 Bankrate Score
Vanguard Digital Advisors keeps it simple: an investment portfolio comprised of four funds at a low all-in price, and then adds on helpful tools and educational components. The combination should do well for clients who don’t need a robo-advisor to provide everything under the sun but want competent investment management from a proven and knowledgeable leader.
Fidelity Go4.5 Bankrate Score
Fidelity Go offers a solid robo-advisor offering that beginning and cost-conscious investors will especially appreciate. However, investors looking for features such as tax-loss harvesting or comprehensive goal planning may be disappointed.
Personal Capital4.0 Bankrate Score
Personal Capital customers will get an experience that more closely resembles that of a traditional financial advisor than a robo-advisor, but you’ll need at least $100,000 to get started. You’ll also get a comprehensive tax strategy to help minimize what you owe to Uncle Sam. But this higher level of service does come at an above average cost compared to the rest of the robo-advisor industry.
Stash3.5 Bankrate Score
Stash’s managed portfolios might appeal to small investors who are looking to save as they spend, but the monthly fees can be high for investors who don’t have a large balance built up and there are only a few types of accounts available.
M1 Finance4.5 Bankrate Score
M1 Finance takes some of the best of what brokers and robo-advisors do and mixes it into a new service that provides automated investing in a fully customizable portfolio – all for no cost. If you want to take it up a notch, you can pay an additional fee and receive a host of upgraded features, including one of the best cash management accounts out there.
Wealthfront5.0 Bankrate Score
Wealthfront offers a strong lineup of features – sophisticated portfolio management using low-cost funds – that showcase why it’s one of the leading independent robo-advisors. It provides a strong cash management account, a robust planning tool and premium features such as tax-loss harvesting that may more than pay back your annual fee.
Ellevest3.5 Bankrate Score
Ellevest brings a competent and well-considered robo-advisor, pitching itself to women, whose financial needs are traditionally underserved. But don’t think it won’t work for anyone who needs nuanced investment management, since it offers low-cost funds, socially responsible funds and – unlike most rivals – a flat monthly fee, making it advantageous for those with more to invest.
Schwab Intelligent Portfolios5.0 Bankrate Score
Schwab Intelligent Portfolios provides a top robo-advisor experience that should be a good fit for many investors. The basic plan comes with no management fee and a low-cost portfolio, plus you’ll get Schwab’s top-notch customer support and easy-to-use platform. The premium plan comes with unlimited access to human financial advisors, but both plans come with above-average account minimums and tax-loss harvesting isn’t an option until you reach at least $50,000 in assets.
Acorns3.5 Bankrate Score
Acorns is a good choice for new investors who are starting with small sums of money, allowing customers to build a diversified portfolio with just a few dollars. However, the fees are above average for small account values, though they’ll decline as your portfolio grows, and you won’t find any tax strategy as part of the robo-advisor offering.
Wells Fargo Intuitive Investor4.0 Bankrate Score
Wells Fargo Intuitive Investor is a solid robo offering that gives customers easy access to human financial advisors at no additional cost along with tax-loss harvesting that can help you save on taxes. However, the management fee is above average unless you’re an existing Wells Fargo banking customer.
Ally Invest Managed Portfolios4.0 Bankrate Score
Ally Invest Robo Portfolios are a good option for new investors who pay particular attention to costs. Existing Ally clients may also appreciate having all their finances in one place. Unfortunately, Ally doesn’t offer tax-loss harvesting or provide human advisors to help with those especially difficult questions.
SoFi Automated Investing4.5 Bankrate Score
SoFi Automated Investing gives cost-conscious investors a solid robo-advisor offering that comes with access to human financial advisors at no additional cost. But the lack of tax-loss harvesting and no socially responsible investing options may cause more sophisticated investors to look elsewhere.
Marcus Invest4.0 Bankrate Score
Marcus Invest offers the core feature of a robo-advisor – portfolio management – and then adds some twists, such as several portfolio types, all for a cost-competitive fee. It’s a great add-on for current Marcus customers, though some features of higher-end robo-advisors such as tax-loss harvesting and an expansive toolset are missing.