Charles Schwab vs TD Ameritrade vs Merrill Edge/Lynch: Comparison Chart 2015

TD Ameritrade vs Charles Schwab vs Merrill Edge/Lynch: Pricing

TD Ameritrade and Charles Schwab are the largest and best-known brokerage houses in the United States. Merrill Edge is a new discount brokerage created by Merrill Lynch, which is now owned by Bank of America. Merrill Lynch is a full-service brokerage firm, which means that its clients give their money to Merrill Lynch to manage. This is almost completely hands-free approach to investing. Merrill Lynch charges a percentage of all the client assets every year as a fee for these services. Of course, the company accepts only rich clients. For customers that don’t have enough money to qualify for a managed service, or for those who want a do-it-yourself (DIY) approach, Merrill Lynch created self-directed brokerage division called Merrill Edge.

Merrill Edge is the cheapest brokerage firm in this broker comparison, charging just $6.95 per stock or ETF trade. Charles Schwab charges flat-rate $8.95 per trade, and TD Ameritrade’s rate is $9.99 for the same trades.

Merrill Edge’s commission on no-load transaction-fee mutual funds is $20 per transaction. Charles Schwab priced mutual funds at $76 (free to sell) and TD Ameritrade at $50 per transaction.

Merrill Edge seems to have a hard time keeping up with competition: it cut pricing a few times and even canceled unpopular maintenance fee. TD Ameritrade and Charles Schwab also don’t charge account maintenance or inactivity fees as well as fees for setting up and maintaining IRA accounts.

Services

All three brokerage houses in this review provide great investment research services from at least a few companies. TD Ameritrade and Charles Schwab are known for very responsive customer service. Merrill Edge, on the other hand, has some customer service issues.

The three firms offer a wide selection of investment products: U.S. stocks and ETFs, thousands of load and no-load mutual funds, options, Municipal bonds, CDs, U.S. Treasuries, and corporate bonds. TD Ameritrade also provides access to FOREX and futures markets.

TD Ameritrade created powerful and versatile trading tools that will please even professional traders. The company bought one of the best online brokers, ThinkorSwim, and it has benefited greatly from this acquisition. Thanks to ThinkorSwim’s excellent trading technology, TD Ameritrade is the only company in this comparison suited for active traders. Merrill Edge fell far behind its competitors in this category: customers are stuck with basic, buggy trading tools, and experience trade executions issues.

Recommendations

TD Ameritrade beats the competitors in just about every category except pricing (however, Charles Schwab is the best in customer service). We recommend TD Ameritrade for fee-free IRA accounts. mutual funds (13,000 available, 2,458 NTF, commission-free funds) and beginner investors, clients looking for professional trading platform that day traders use.

Charles Schwab is a good company for customers that invest for long-term and for individual retirement accounts.

Merrill Edge’s only advantage is pricing. But we believe that current rates are temporary, aimed to gain customer base, and will be increased once it is done.

More detailed information about each company in this comparison is available in our brokerage reviews articles:

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