Merrill Guided Investing Review 2024: Pros, Cons and How it Compares

Where Merrill Guided Investing shines

Easy integration: Merrill makes it enticing for existing customers or Bank of America clients to get on board with its investing service. The Preferred Rewards program reduces management fees, increases interest rates, gives discounts on auto loans and increases credit card rewards as account balances grow.

Human management: Merrill is a robo-advisor with a twist. It offers human portfolio management in a robo-advisor format.

Where Merrill Guided Investing falls short

What type of investor should choose Merrill Guided Investing?

• Investors who seek human oversight for their investments.

• Existing Merrill or Bank of America customers.

What the Nerds think 🤓

Merrill Guided Investing at a glance

Reviewed: Oct. 2024

Period considered: Aug. - Oct. 2024.

How to sign up for a Merrill Guided Investing account

You can sign up for a Merrill Guided Investing account through the company's Guided Investing website. Existing Merrill or Bank of America customers can use their user ID and password to sign in, and new customers can either create an account or continue the process as a guest.

You'll need to provide your name and date of birth as well as answer a few questions about your savings goals, risk tolerance and time horizon. Merrill will then give you a proposed investment strategy based on your answers before you commit to setting up your account.

How much does Merrill Guided Investing cost?

Merrill Guided Investing has a $1,000 account minimum. Many competitors have a $0 minimum. If you’re starting to invest with a smaller amount of money, you may want to look elsewhere.

Like its account minimum, Merrill’s account management fee is higher than most: 0.45% compared to the more typical robo-advisor fee of around 0.25% or less. That means for a $10,000 account balance, you’ll pay $45 a year in fees.

Merrill Guided Investing accounts also may qualify for the company’s Preferred Rewards program, which offers perks to clients with an eligible Bank of America checking account and three-month average combined balances of $20,000 or more in qualifying Merrill and/or Merrill Lynch investment accounts or Bank of America deposit accounts.

The benefits of the program increase as combined balances grow and include a reduced management fee on Guided Investing accounts. The 0.45% fee drops to:

• 0.40% if your combined balance is $20,000 to $49,999;

• 0.35% for combined balances of $50,000 to $99,999;

• 0.30% for balances of $100,000 or more.

Unfortunately, 0.30% is still more than many robo-advisors charge.

In addition to a management fee, most robo-advisors pass on the expense ratios, or the fees charged by the funds themselves, to the consumer. Merrill’s expense ratios are quite low, ranging from 0.05% to 0.18% for its core portfolio (that range includes the expense ratios for the socially responsible portfolios as well).

We prefer to see no fees, but Merrill’s Guided Investing Fees are fairly standard. There is a $49.95 full account transfer fee and a closeout fee (for traditional and Roth IRAs) that also costs $49.95.

Merrill Guided Investing portfolio selection

Robo-advisor portfolios are typically managed by computer algorithms; that’s the “robo” part. Merrill Guided Investing is built on similar technology but also integrates human oversight. Investors are matched to a recommended investment strategy, or asset allocation, based on the results of an onboarding questionnaire designed to peg their risk tolerance and goals, but portfolios are actually managed by people at the firm.

Many brokers see a double opportunity in the robo-advisor movement: They can charge a management fee for each portfolio and use their own funds within those portfolios, also collecting the expense ratio on these funds.

But Merrill doesn’t have any proprietary ETFs, nor does Merrill Lynch or parent company Bank of America, so ETFs are pulled from a variety of sources.

The service selects from about 25 different portfolios based on risk tolerance, time horizon and allocation and offers portfolios that focus on socially responsible investments.

Merrill Guided Investing offers more flexibility and customization within its managed portfolios than most robo-advisors, including within its socially responsible portfolio option. Merrill uses a specific framework including avoiding investments that have negative social or environmental effects and supporting positive ones, and Merrill lets you customize your investment strategy so that you can support particular issues you care about. Merrill's socially responsible portfolios have expense ratios between 0.10% to 0.18%.

Other key Merrill Guided Investing features

Accounts supported

Merrill supports individual, joint and custodial taxable accounts, Roth, traditional, SEP and Simple IRAs. Clients may roll over assets into the traditional IRA or other retirement account.

Rebalancing

Rather than a set rebalancing frequency, rebalancing needs are determined by Merrill’s Chief Investment Office. Those rebalancing needs can include changes in target asset allocation and flows into and out of the account. That means rebalancing isn’t automatic, but it does have a human touch. There are no additional fees for rebalancing.

Customer support

In addition to 24/7 phone, online, mobile and chat support, clients can meet with a Merrill advisor at one of about 2,500 locations across the U.S. The advisors aren’t there to offer investment advice or financial planning guidance, but they can answer general questions, such as how to fund the account and how to use the account's tools.

Tax strategy

Merrill offers free tax-loss harvesting on all accounts and 10 "tax aware" portfolios to clients whose situation warrants it. Tax-loss harvesting is an investment strategy that can significantly reduce capital gains taxes.

Good to know about Merrill Guided Investing

Human advisor option

Merrill Guided Investing’s 0.45% fee tier does not offer access to a human financial advisor. If you’re looking for advice from a financial advisor, jump to Merrill Guided Investing with Advisor.

Savings account/cash management option

Merrill partners with Bank of America to offer a cash management account. Compared with providers that offer a high-yield savings account, the interest you could potentially earn is quite low. If you are able to participate in the Preferred Rewards program, that interest rate can increase depending on your qualifying account balance (qualifying combined balances of your Merrill investment accounts and Bank of America deposits):

• Interest rate boost of 5% if your combined balance is $20,000 to $49,999;

• 10% boost on combined balances of $50,000 to $99,999;

• 20% boost on balances of $100,000 or more.

Those percentages may sound generous, but as it stands, Bank of America’s interest rate is so low that even a 20% increase is negligible.

Is Merrill Guided Investing safe?

While all investing comes with risk, Merrill investments are covered by the Securities Investor Protection Corporation (SIPC). This means that up to $500,000 in securities and $250,000 in cash are safe in your Merrill account. If you have securities that exceed that limit, you have further protection at Merrill under the Lloyd's policy, which covers $1 billion in securities and $1.9 million in cash.

Merrill Guided Investing with Advisor

Merrill Guided Investing with Advisor has a management fee of 0.85% and a $1,000 account minimum. Some portfolios, such as Alpha-Seeking strategies, require a $20,000 minimum. If you qualify for the rewards program described above, that fee drops to 0.80%, 0.75% or 0.70% depending on your total combined balance.

The upper-tier service offers access to a human advisor who can give you one-on-one advice, help you establish goals and meet with you for periodic reviews. These advisors hold a variety of designations, and while some of them are CFPs, not all of them are. You can, however, get help in person at Bank of America locations.

While Merrill does offer access to human advisors, other companies provide the same service at a lower cost, or even for free. Charles Schwab's Intelligent Portfolios Premium offers unlimited access to CFPs for $30 per month plus a $300 one-time planning fee — which shakes out to 0.36% on a $100,000 balance, plus the planning fee.

Merrill Guided Investing with Advisor offers the same strategies as the lower tier, plus it offers an Alpha-Seeking strategy, which includes mutual funds in the portfolios. Because of this, the portfolio costs are generally a bit higher than the Core portfolios — 0.41% to 0.47% versus 0.05% to 0.18%.

» Want to compare options? Check out our roundup of the best wealth advisors.

Reviewed in: Oct. 2024.

Period considered: Aug. - Oct. 2024.

Merrill Guided Investing with Advisor at a glance

Is Merrill Guided Investing worth it?

If you’re a Merrill or Bank of America loyalist and you’ve been wanting to take a dip in the robo-advisor waters, this might be where you get started. It’s a relatively easy transition, and your account will integrate pretty seamlessly with your existing accounts. You may also qualify for the company’s Preferred Rewards offering, which could mean a lower management fee and other perks.