TopTenREVIEWS researched and ranked the top stock trading services in the country. Both Vanguard and Merrill Lynch made it to the 16th and 17th slots on our comparison matrix. Although higher fees may have kept the two brokerages out of the top ten, other attributes make them a good contender for big time investors or those looking for stock trading services within a more traditional, full-service type brokerage. See how both companies stack up against each other.
Vanguard favors big-time versus small-time investors. A minimum investment of $3,000 is required to open an account. For stocks and exchange-traded funds (ETFs), trading Vanguard ETFs is free with certain stipulations. There is a charge for trading stocks and non-Vanguard ETF's. Investors with $1 million plus receive Flagship Services where the first 25 trades are free and all subsequent trades are $2 each. Vanguard offers a $2 trade rate for those investing between $500,000 to $1 million through its Voyager Select Services. Voyager Services are for those with $50,000 to $500,000 to invest and all trades are $7. Anyone who invests less than $50,000 receive the standard service and a $7 trade rate for the first 25 trades and $20 for all subsequent trades. Standard service investors also must pay an annual $20 service fee, although the fee is waived for Voyager, Voyager Select and Flagship clients.
The fees for Merrill Lynch may cost less for trading, however their representative-assisted orders are expensive. They offer three services. Their Standard service is for investors with balances up to $250,000. Preferred is for $250,000 up to $1 million and Superior is $1 million plus. Standard Services charge $8.95 and a whopping $75 for broker assisted orders. Preferred Services is at $6.95 with $50 for rep assistance. It costs $4.95 for Superior with also $50 for broker-assisted orders. The margin interest rates range from 4.5% to 8.625%.
Options: The trade rate for options is pretty high for non-Flagship members. It's $30 plus $1.50 per options contract if you get Standard, Voyager or Voyager Select Services. For Flagship Services it's only $8 plus $1.50 per contract. For Standard Services, Merrill Lynch charges $8.95 plus $.75 per contract and $40 plus $1 for broker assistance. Preferred Services is at $6.95 plus $.75 a contract with $30 plus $1 a contract for rep assistance. Superior Services charge $4.95 plus $.75 a contract and $30 plus $1 a contract for broker assistance.
Both online services offer about the same types of equity investments including stocks, options, mutual funds and exchange traded funds. They also offer income-bearing securities including bonds, Certificates of Deposit (CDs) and U.S. Treasury and Agency Issues. Both also offer retirement accounts, college savings accounts, cash management accounts
Trading and Research Tools
Both have the tools you need to make good investment decisions. You could customize your desktop with graphs, charts, quotes, market analyst reports, news and alerts. Investment educational resources are also available online. Both online brokerages also have apps for mobile phones.
Vanguard offers over 30 years of investing experience and has three offices nationwide. Support reps are available via email and phone. It also has online support and Frequently Asked Questions (FAQs). You can place orders online at their website and also by phone through a licensed broker. Merrill Lynch has over 600 offices in the U.S. and also offers personalized support via email and phone.
More on Money
Both companies have high fees which puts near the bottom of the list. If you have over $1 million to invest you're considered the more favored investor and would benefit more than small investors. Using Vanguard s services benefits those who want to invest in Vanguard ETF's most or all of the time.
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