Merrill Guided Investing Review

Pros and Cons of Merrill Guided Investing

Types of Clients

Merrill Guided Investing offers relatively low account minimums that make its services accessible to almost all client types. For its Online tier, which only grants you access to a robo-advisor, you’ll need at least $1,000 to open an account. However, Guided Investing with an advisor requires you to have at least $20,000 initially.

Unlike some other firms, Merrill’s pairing of a robo- and human-advisor in one service is noteworthy. If the idea of giving complete control of your portfolio to a computer makes you uncomfortable, Guided Investing may be a good choice because it affords you access to a real person.

What Merrill Guided Investing Offers

Merrill Guiding Investing provides clients with automated investing services. This includes robo-advisor tools, professionally managed portfolios, and access to specific investing strategies. Additionally, with an initial investment of $20,000 or more, you’ll be able to work with a human advisor.

Guided Investing splits into two tiers – Online and Online with an advisor. Below is a breakdown of what each level includes:

Online

With a relatively modest initial investment of $1,000 or more, you’ll get to utilize Merrill’s robo-advisor and online trading platform. Once you create your account, the program will attempt to gain an understanding of your goals, risk tolerance, and time horizon. From there, it’ll formulate a “target asset allocation” and overarching strategy, which it will use to construct your portfolio.

As mentioned, your target allocation is made up of several factors, including a “Goal Target” that sets the amount of money you want to end up with in the account. Your target asset allocation will match one of the following categories:

• Conservative. This approach emphasizes the stability of your portfolio by taking on less risk through your investments.
• Moderately conservative. This attempts to modestly grow your portfolio over time while reducing risk as much as possible.
• Moderate. With this method, the goal is to blend risk and reward. Essentially, you’ll assume a certain level of risk in an attempt to grow your portfolio.
• Moderately aggressive. Here, you’ll assume more risk to gain slightly larger returns than normal.
• Aggressive. This prioritizes gaining the highest possible returns while also accepting a corresponding level of risk. Portfolio volatility is highly likely in this arrangement.

Once you have a target allocation, Merrill’s software will help you identify a “Strategy” that will dictate how its robo-advisor will invest your funds. The firm states in its Wrap Fee Program Brochure that the blueprint for your portfolio is only “based on the information you have provided.” In the Guided Investing program, Strategies are “model portfolios” that the Chief Investment Office (CIO) builds. These are mainly made up of ETFs and mutual funds.

Periodically, Merrill’s robo-advisor software will monitor and rebalance your portfolio. This only occurs if it senses a deviation from your target allocation and strategy.

Online With an Advisor

If you’re able to invest $20,000 or more, you will receive all of the benefits of the previous tier, as well as access to a human advisor for guidance. With this arrangement, a professional will sit down with you to help construct your portfolio, review your progress, and adjust your investments as necessary.

Fee Structure and Cost

Merrill charges a non-negotiable fee percentage based on your assets under management (AUM) for its Guided Investing service. The firm assesses it based on your past month’s balance. The fee also increases if you decide to go up a tier and receive help from an advisor.

Below are the percentages for each level:

• Guided Investing – 0.45% of the previous month’s balance
• Guided Investing with an advisor – 0.85% of the previous month’s balance

You may also be responsible for transaction and fund management fees. These are separate from advisory fees associated with maintaining your account.

Investment Philosophy

Both the investment philosophy and approach that Merrill takes are dependent on each client’s goals and target allocation. Once you open an account, you’ll need to provide information regarding how much money you intend to have after a certain period, as well as your risk appetite. Then, the firm will work with you to select an asset allocation and investment strategy that works for you.

As mentioned earlier, Merrill’s target allocation options range from conservative to aggressive, with others in between that blend the two approaches. No matter the approach, you can expect much of your portfolio to comprise ETFs and mutual funds that correspond with your goals.

Putting your trust in a computer to build your portfolio can be a bit unsettling. However, Merrill is a registered investment advisor (RIA) with the SEC, meaning it and its software must act as a fiduciary.

Disclosures

Merrill Lynch, Pierce, Fenner & Smith Inc. is registered with the SEC as an investment advisor. Because of this distinction, it must report any legal events involving it and its representatives as a disclosure on its Form ADV. Per FINRA’s BrokerCheck, it has 1,474 disclosures on file. 595 of these are regulatory events, which refer to legal or disciplinary actions against the firm.

Customer Service

If you need to contact Merrill’s customer service, you have a few options:

• Visit the firm’s support page.
• Call (800) 637-3343.
• Meet an in-person expert by scheduling an appointment.

Phone App

Merrill Edge offers a mobile app for both Apple and Android devices. It lets you manage your investment accounts from your device, including buying and selling securities. It has an impressive 4.6 out of 5 stars on the Apple App Store. However, it only has 3.6 out of 5 on Google Play, with users citing UX and speed issues.

How to Start an Account

To open a Merrill Guided Investing account, you’ll need to visit the firm’s website and click “Open an Account” in the top right corner. From there, you can select Guided Investing and complete the signup process. If you’re already a client of Bank of America or Merrill Lynch, signing up can be even quicker.

Methodology

The information in this review is based on publicly available information directly from Merrill Edge’s website and the SEC. Neither the firm nor its representatives have any say on what we’ve included on this page.

Frequently Asked Questions

Is Merrill Guided Investing good?

Merrill Guided Investing may be a good option if you’re a new investor or still want to work with a human advisor. It also allows you to develop a portfolio that aligns with your goals and risk tolerance. However, keep in mind that it only offers an investment management solution, meaning that if you need financial planning or wealth management, it may be better to seek a more comprehensive option.

Is Merrill’s robo-advisor a fiduciary?

Merrill Lynch is registered with the SEC as an RIA. Because of this, the entire company (including its robo-advisor software) must act in a fiduciary capacity.

What is the annual fee for Merrill Guided Investing?

The advisory fee for the lower tier that only includes a robo-advisor is 0.45% of the previous month’s account balance. If you upgrade to Guided Investing with an advisor, you must pay 0.85% of the prior month’s balance.

What is the minimum amount for Merrill Guided Investing?

You must invest at least $1,000 to access Guided Investing. For Guided Investing with an advisor, you need at least $20,000.