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Betterment vs Merrill Edge 2020: Best Investment Platform?

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Written by Matthew Cerminaro
Updated on May 1, 2020

Betterment vs Merrill Edge

Getting started with investing can be a daunting task for many. With so much conflicting information regarding different brokerage accounts, it can be difficult to figure out which may be the best fit for you.

As firms move to more readily available applications for the average person, the barriers to entry for retail investors have greatly diminished over the past decade. Now, you can simply sign up with your phone to begin investing. 

Online brokerages have come a long way in recent years, with one of the biggest changes being a move to commission-free trading. 

These advancements and changes in brokerage functionalities have attracted a lot of attention from investors. But, where do you start? How can you tell which app or service is the best for you? 

In this article, we will be providing analysis on two brokerage services; Merrill Edge and Betterment.

Our aim here is to provide clarity on some of the most frequently asked questions surrounding them. It is never too late to begin your journey down the road of saving, accumulating, and building your wealth. We hope that this article can help you decipher what vehicle is right for you. 

Summary: 

  • Both of these services offer high-quality options for new investors
  • Merrill Edge is catered towards the investor that is interested in making his or her own investment decisions
  • Betterment’s portfolio automation makes it an extremely beginner-friendly platform for the beginner investor
  • Both Merrill Edge and Betterment offer $0 minimum deposits, however, both also offer rewards and incentives for clients to add more to increase their account value
  • Betterment offers a high quality, high-interest cash savings account for the client who is looking to accrue interest within taking risk in the financial markets
  • Merrill Edge offers $0 commissions on all trades executed
  • Merrill Edge offers high-quality research from Bank of America to its clients
  • If you are interested in learning how to read charts, Merrill’s free trading platform, Merrill Edge MarketPro(®) will provide you with that ability
  • If you want investment advice from a professional, both platforms have fees
  • Betterment is heavily goal-oriented and tailors its service to the investors individual goals and aspirations
  • Merrill Edge allows you to trade stocks while Betterment only offers portfolio based investing
  • Merrill Edge Guided Investing has an annual fee of 0.45-0.85% with a $5,000 minimum
  • Betterment collects a fee of 0.25-0.40% for advisement with a $0 minimum

Click here to invest with Betterment! 

What Is Merrill Edge?

Merrill Edge is the online brokerage service associated with Merrill Lynch and an arm of Bank Of America. The firm is headquartered in New York City and has been a trusted bank since 1914. 

Merrill Edge is an online brokerage service that is committed to providing self-directed investing services to all of its clients. The main goal of Merrill Edge is to offer online streamline investing as well as other guided alternatives to suit the investor’s goals. 

Merrill Edge Features

Zero Brokerage Fees

Offering $0 brokerage fees on online stock, ETF, and options trades, Merrill Edge has positioned itself at the forefront of brokerage services offering a low-cost way for clients to finance their investment ideas and goals. 

Merrill Edge MarketPro®

The Merrill platform provides traders with a state of the art trading platform. This helps increase their efficiency through available real-time data, interactive charting, and gives them a step up on the competition. 

Merrill Guided Investing

For an annual fee of 0.45%, Merrill offers the ability to have your portfolio managed by a professional.

The minimum investment in this type of portfolio, however, is $5,000. This service should appeal to those who are not interested in making their own investment decisions and feel more comfortable with a professional managing their money. 

Merrill Guided Investing with an Advisor 

This is similar to Merrill’s Guided Investing Service, but with the guidance of a professional to discuss your investment goals and priorities. The annual fee for this service amounts to 0.85% annually with a minimum investment of $20,000. 

Research Services

Merrill Lynch prides itself on the cutting-edge research that it provides to clients.

This award-winning research helps clients decipher market uncertainties and guide the decision-making process that all retail investors face when investing. Merrill also provides its investors with access to Bank of America’s Global Research through its Merrill Edge MarketPro(®) platform. 

Customer Support 

Merrill Edge provides top of the market customer support 24/7.

This live support can provide a vital tool for investors to tap into when getting started with the service. 

Merrill Preferred Rewards & Cash Rewards

Clients receive various benefits and incentives to save through several Merrill directed programs. 

Merrill offers different cash rewards as you continue to increase your account size. That is, the more money you put into your account, the greater the cash reward that Merrill offers.

Pros of Merrill Edge

  • $0 brokerage fees for stock, option, and ETF trading
  • Top quality research provided by BofA, a well-established and top-quality research provider
  • Merrill Edge MarketPro(®), a cutting edge, free trading platform
  • $0 minimum on self-directed brokerage accounts
  • Multiple options for Guided Investing
  • Integration with well-established Bank of America
  • Cash rewards as an account is funded

Cons of Merrill Edge 

  • Limited business news on mobile app
  • Minimal direct guidance from professionals on self-directed accounts
  • Excess costs associated with Mutual Fund trading
  • Fees are a little high for Guided Investing

What Is Betterment?

John Stein, Betterment’s founder, believes that money should work for you just as hard as you work for it.

His goal and reason for creating the app is to combine proven investment strategies with cutting edge technology in order to drive down costs and help investors achieve their goals. He created this Betterment with the goal to meet and exceed those measures.  

Betterment is striving to empower its clients to make the most of their money. They are acting as a bridge between those in the Financial Services Industry and people who want to change their wealth habits. 

Click here to invest with Betterment! 

Betterment Features

Portfolio Automation 

Betterment invests your money for you. You choose your investment goals and time horizon, and Betterment will automate the rest of the process for you. With Betterment, they choose the investment for you since this is a robo-advisor only. You cannot pick and choose individual stocks. 

Cash Reserve 

Betterment offers a high-yield cash account as well called Betterment Cash Reserve. This service provides investors with the option to keep their money in their accounts idle while still accruing high amounts of interest. In other words, this is essentially a zero-risk way to earn interest on your money. 

RateAs Of
0.40%5/19/2020

Betterment Fees

Betterment offers different rates and management fees based on the plan that you decide to engage in. These plans are laid out below. 

Betterment Digital

This package includes portfolio automation, tax efficient management, investment advice, and cutting edge customer support. The annual fee for this plan is 0.25% and there is no minimum balance requirement. 

Betterment Premium

This plan includes all of the benefits of the Digital plan, plus some.

The key benefit here is access to Betterment’s team of financial professionals and licensed financial experts. This can be great for the investor who wants to know more about the decisions that Betterment is making with their money. This also includes increased monitoring of portfolio plan by licensed financial experts.

The annual fee for this portfolio is 0.40% with a $100,000 account minimum. 

Zero Withdrawal Fees 

Betterment offers no withdrawal fees, making it cheap and easy to access your money. 

Pros of Betterment

  • Relatively low cost fixed fees on managed portfolios
  • High yield cash account
  • Educational resources available for free on website 
  • Extremely beginner friendly
  • Award winning customer support
  • Select an investment policy that meets your goals and criteria 
  • Takes into account your risk tolerance as an investor

Cons of Betterment 

  • Unable to choose the exact companies and instruments to invest in
  • Highly automated (could be good or bad depending on your interests)
  • Personal investment advisory is not free; $100,000 minimum to receive this feature
  • Low fixed fees, however still able to nibble at returns

Betterment vs Merrill Edge: The Verdict

Both Merril Edge and Betterment offer attractive ways to grow your wealth. The real debate and decision comes down to your personal investing style and goals.

Do you have interest in personal investing and making your own decisions on stocks and other financial instruments? If so, Merrill Edge may be a great option. It allows its clients to initiate trades with $0 brokerage fees and provides research from one of the world’s most prestigious banks, Bank of America. 

On the other hand, if you are less confident in your personal ability to choose the right investments, and feel like it is a better choice to “leave it to the professionals," Betterment is a fantastic option. Just make sure you realize the fees are mostly for financial planning and investment management. 

Click here to invest with Betterment! 

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  • Thanks for the article. This was a good read for an investing novice. Not only pointing out the pros and cons of each service; but it also helps to know in general, the kinds of things one should consider when opening an investment account with ANY provider. Thanks for helping to improve financial literacy in general.

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