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Merrill Guided Investing and E*TRADE Core Portfolios are two robo-advisors that stand out for their corporate roots and histories. Merrill Lynch & Company was a famous full-service broker that was absorbed by Bank of America in 2009. E*TRADE, the high-profile discount brokerage, was acquired by full-service broker Morgan Stanley in 2020. Additionally, both companies are among the winners in our list of the best robo-advisors of 2024, with Merrill Guided Investing winning best for education, while E*TRADE Core Portfolios is best for mobile.
Both robo-advisors successfully simplify investment decisions by offering a collection of useful portfolio alternatives that don’t require a sophisticated understanding of finances. Both also assume that their clients want a balance of risk management and growth potential, and the option of selecting environmentally friendly investment choices. However, they differ in their approach to delivering these features. As you’ll learn from this head-to-head comparison, the most significant differences are found in the cost, portfolio management, and customer service features of these two platforms.
- Account Minimum: $1,000, or $20,000 with an advisor
- Fee: Annual 0.45% of assets under management, assessed monthly. With advisor—0.85%. Discounts available for Bank of America Preferred Rewards participants.
Key Takeaways of Merrill Guided Investing
- Our pick for best robo-advisor for educational content
- Accounts integrated with Bank of America products and services
- Offers 24/7 customer service
- Provides a robust collection of investing calculators and other tools
- Tax-aware portfolios but no tax-loss harvesting
- Account Minimum: $500
- Fee: 0.3%
Key Takeaways of E*TRADE Core Portfolios
- Our pick for best robo-advisor for mobile users
- Improved asset depth as part of the integration with Morgan Stanley
- Quick and efficient setup for E*TRADE customers
- Can open an account with just $500
- Added tax-loss harvesting in the last year
Account Setup
Merrill Guided Investing
Setting up a Merrill Guided Investing account is a straightforward procedure. You begin by answering basic investment questions in an online questionnaire. Here you’ll specify your investing goals, financial contributions, and timelines for investing. If you have multiple investment accounts, the questionnaire is comprehensive enough to include them in its eventual calculations as well. You can then choose your risk tolerance or answer a few questions that will yield a suggestion to consider.
The next step requires you to choose your primary investing goal and provide a customized name for it. That sets you up to select between a market-tracking portfolio, which focuses on getting the best gains, or a portfolio that favors companies with high scores in environmental, social, and governance (ESG) criteria. Before completing the sign-up, you receive a targeted asset allocation, ranging from conservative to aggressive, based on your questionnaire answers. This tradeoff between performance-seeking and values-based investing allows the platform to cater to your personal preferences.
E*TRADE Core Portfolios
The first step includes answering a dozen or so questions which are mostly aimed at helping you understand your risk tolerance. These sections are very well done and will help you better understand the tradeoff every investor has to make between risk tolerance and targeted returns.
The final step in the online questionnaire asks whether you want to add a specific investing focus. Here you are offered a choice of emphasizing ETFs that target socially responsible investing (SRI), similar to the ESG criteria mentioned earlier. Another alternative mentioned is a focus on smart beta strategies in an attempt to outperform the market. It isn’t abundantly clear that this choice is a mutually exclusive tradeoff between favoring a values-based investment style and performance-hunting investing style, but that is the case since you can only select one or neither of them.
Account Setup Verdict: E*TRADE Core Portfolios
E*TRADE Core Portfolios gets the edge in account setup. While both robo-advisors have an easy onboarding, we appreciated the extra level of portfolio detail with the types of funds that would be in the allocation that E*TRADE Core Portfolios creates. E*TRADE also has an edge in account minimums, at $500 versus $1000 for Merrill Guided Investing.
Account Types
For both Merrill Guided Investing and E*TRADE Core Portfolios, the final setup steps are to choose the account type and fund the account.
The account types available on both platforms include:
- Individual or joint brokerage accounts
- Retirement accounts, including traditional individual retirement accounts (IRAs), Roth IRAs, simplified employee pensions (SEP), SIMPLE IRAs, 401(k) to IRA rollovers, and others
- Custodial accounts, including Uniform Transfers to Minors Act (UTMA) and Uniform Gift to Minors Act (UGMA) accounts
Account Types Verdict: Tie
Both of these robo-advisors offer all the commonly used accounts as well as the custodial varieties. The vast majority of investors will find the account types they need at either of these companies.
Account Services
Merrill Guided Investing
This platform offers excellent tools and features, including the following highlights:
- Research tools: The platform offers excellent goal-planning tools and calculators that can be accessed by all clients who meet the minimum starting balance of $1,000.
- Access to financial advisors: Clients can speak with financial advisors if they pay a 0.85% management fee and maintain a $20,000 balance.
- Preferred rewards: Program clients qualify more quickly for Bank of America Preferred Rewards, including management fee discounts and lower interest rates on loans.
E*TRADE Core Portfolios
This platform caters to customers who need assistance along the way by including the following features and services.
- Access to help: Platform clients can speak with staff by phone or at branch offices.
- Values vs. performance portfolios: Clients can select portfolios filtered through sustainability and corporate governance criteria, or they can select portfolios with the goal of beating the market through the use of smart beta strategies.
- Low minimum balance: The $500 minimum lets smaller and younger investors get started investing towards their goals with limited risk.
Cash Management
Neither E*TRADE Core Portfolios nor Merrill Guided Investing stands out in terms of cash management. These digital investment platforms are part of a larger financial ecosystem that offers more cash management offerings like loans, checking accounts, and so on. In terms of cash inside the platform, E*Trade Core Portfolios holds 1% of your portfolio in cash and it is swept into a money market account that yields just 0.01%. Merrill Guided Investing also allocates some percentage to cash and offers a solid 4.13%.
Cash Management Verdict: Merrill
It is difficult to compare robo-advisors that have added cash management features to full financial firms that have added robo-advisors. Both E*TRADE and Merrill Guided Investing have full-featured cash management adjacent to their platforms, just not within them. Merrill Guided Investing takes the category here for having a higher interest rate on cash held in the account.
Goal Planning
Merrill Guided Investing
Merrill Guided Investing shows its strength in goal planning. It has you select a singular goal for your account and then helps you select a portfolio style that gives you the right mix of risk and reward to accomplish your goal.
This platform walks you through its questionnaire and generates more opportunities for portfolio customization after you enter a birthdate, goal amount, and the goal’s time horizon. The platform is focused on retirement by default, but it allows you to define non-retirement goals that include:
- Retirement at a specific age
- General investing
- Home
- Education
- Family support
- Travel
- Special occasions
- Other large purchases
While there is no guidance for figuring out appropriate targets or time horizons for these goals, and you can only select one for the entire account, the platform does a great job integrating goal-planning tools and tracking functions, and providing prompts for funding to help investors stay on track. With these tools, you can set target time frames with educated estimates.
E*TRADE Core Portfolios
E*TRADE Core Portfolios doesn’t spend as much time on your choice of goals, but rather assumes you have the singular goal of maximizing your returns for wealth, retirement, or something else. The platform instead orients you to the subject of risk tolerance right from the start.
E*TRADE Core Portfolios seeks to eliminate confusion by simplifying your focus. The platform is built on the assumption that you want to maximize performance, so its opening questionnaire will help you identify your tolerance for fluctuating account values over the years ahead.
This is a key concept for any investor who wants to achieve their desired performance. Investors who don’t understand their own risk tolerance are much more likely to sabotage their investing goals by changing strategies over time. E*TRADE Core Portfolios users do have access to E*TRADE’s extensive research and educational resources, including retirement calculators and other planning tools, but the functions are not built into the Core Portfolios questionnaire experience, so they are only useful after the account has been opened.
Goal Planning Verdict: Merrill Guided Investing
While both platforms arrive at a similar end through different means, investors who are goal-oriented will appreciate Merrill’s approach.
Portfolio Construction
Merrill Guided Investing
Merrill’s offering has several different investment strategies that align both with the firm’s research and your answers to the questionnaire you completed when opening the account. Though the strategies may target various investing approaches, they follow the classic principles of modern portfolio theory (MPT).
The platform’s offerings have no set schedule for rebalancing, as they can be triggered by changing risk profiles, contributions, and withdrawals or unspecified market conditions. The platform’s portfolios are directed by a mix of algorithms and fund managers’ guidance. The risk tolerances are low, medium, and high, and there is the option to have socially responsible investment principles inform your allocations. Merrill Guided Investing is all through funds, so it does not offer any exposure to alternative assets like cryptocurrency.
E*TRADE Core Portfolios
E*TRADE Core Portfolios are also based on MPT principles and offer highly diversified swaths of the international and domestic market. This is due to the tie-up with Morgan Stanley increasing the pool of equities and tweaks to the model to consider equities of different sizes to increase overall diversification. In addition to improved asset depth, E*TRADE Core Portfolios has tweaked its risk models. Core Portfolios previously had a range from low-risk portfolios with 20% bonds and cash equivalents and 80% stocks up to high-risk with 80% stocks and 20% bonds. These have been expanded to include an all-risk portfolio which is 100% equities. E*TRADE Core Portfolios are all done through funds, like Merrill Guided Investing, so no alternative assets like cryptocurrency are available.
Available Assets
| Asset Types | Merrill Guided Investing | E*TRADE Core Portfolios |
|---|---|---|
| Individual Stocks | No | No |
| Mutual Funds | Yes | No |
| Fixed Income | Yes (through ETFs and mutual funds) | Yes (through ETFs) |
| REITs | No | No |
| Socially Responsible or ESG | Yes | Yes |
| ETFs | Yes | Yes |
| Non-Proprietary ETFs | Yes | Yes |
| Private Equity | No | No |
| Crypto, Forex | No | No |
Portfolio Customization
As with most robo-advisor solutions, the construction of a portfolio of ETFs and mutual funds begins with a starting allocation algorithmically determined based on the questionnaire answers. From there, the portfolio strategy can only be enhanced and customized in limited ways, specifically to either incorporate a focus on socially responsible investing (SRI)/ESG criteria or to focus on market-beating strategies, which means accepting greater risk.
Merrill Guided Investing
Beyond the initial setup of a portfolio, you can specify as part of the questionnaire that you prefer a portfolio solution based on ESG criteria. The fine print on the website adds a bit of caution that investors should take note of; for instance, ESG investing poses certain risks by limiting the account’s investment options. Investors who set their preferences solely based on ESG criteria will waive prospecting investment opportunities that could benefit their portfolio.
E*TRADE Core Portfolios
E*TRADE Core Portfolios customization has improved in the sense that you have more risk models to choose from. With E*TRADE Core Portfolios, you also can nudge the algorithm to go beyond the initial portfolio selection by adopting a focus towards either SRI goals or smart beta goals. This customization creates a tradeoff between a values-oriented strategy and a performance-oriented strategy, though neither customization is a required ingredient of your strategy.
Portfolio Customization Verdict: E*TRADE Core Portfolios
While neither of these robo-advisors stands out in the industry in terms of customization, E*TRADE Core Portfolios takes this category by having more options and a larger underlying tweak to the portfolios with an all-risk model portfolio.
Portfolio Management
This is a major point of differentiation between the two platforms, as E*TRADE’s robo platform uses a set rebalancing schedule and Merrill’s does not. Although this difference is clearly defined, the anticipated benefit or cost of this difference is not. Neither broker provides any data or theory that forecasts which approach is likely to provide better performance. However, it is logical to conclude that the human fund managers included in the Merrill Guided Investing platform are likely related to the higher fees the broker charges.
Merrill Guided Investing
The platform allows for rebalancing the account under a variety of circumstances. These rules are intended to optimize performance for investors by aligning the account to the target asset allocation. The criteria for rebalancing allows for variations of asset performance, market conditions, and human managers’ discretion to account for unforeseen events. Merrill Guided Investing also takes your synced accounts under consideration when managing your account.
E*TRADE Core Portfolios
Accounts are monitored daily and rebalanced semi-annually to align with the initial allocation identified by the algorithm at the account opening. E*TRADE Core Portfolios have a drift tolerance of 5%, but most of the rebalancing is going to occur as contributions go in or withdrawals go out.
Portfolio Management Verdict: Merrill Guided Investing
Here again, there is not much daylight between these two. E*TRADE has a very clear approach to rebalancing, which is good, but Merrill actually takes synced accounts into consideration when managing your account. This is rare for a robo-advisor and gives Merrill the edge here.
Tax-Advantaged Investing
Merrill Guided Investing does not provide tax-loss harvesting services. Merrill Guided Investing does have tax-aware portfolios that it will place investors in to minimize income with tax-advantaged investments. E*TRADE Core Portfolios include a component of tax-sensitive strategy in the portfolios it offers. This tax sensitivity includes the addition of municipal bonds in the portfolio, which offer beneficial tax treatment to offset the impact of taxable gains. E*TRADE Core Portfolios also added tax-loss harvesting recently and monitors daily for opportunities to realize losses to offset gains in other parts of the portfolio.
Tax-Advantaged Investing Verdict: E*TRADE Core Portfolios
E*TRADE Core Portfolios has a clear edge over Merrill Guided Investing by offering tax-sensitive portfolio construction and tax-loss harvesting in taxable accounts.
Key Portfolio Management Features
| Key Portfolio Management Features | ||
|---|---|---|
| Feature | Merrill Guided Investing | E*TRADE Core Portfolios |
| Automatic Rebalancing | Rebalancing is done with human oversight and occurs as preferred asset allocations and market conditions change | Monitored daily, rebalanced whenever the account drifts out of line with the portfolio allocations by at least 5% |
| Reporting Features | Dashboard is available 24/7, along with regular statements | Dashboard is available 24/7, along with regular statements |
| Tax-Loss Harvesting | No | Yes |
| External Account Syncing/Consolidation | Yes; external accounts are synced when the user sets up goals and considered when asset allocation and goal planning are determined | No |
Security
Merrill Guided Investing and E*TRADE Core Portfolios both use heavy-duty 256-bit SSL encryption and client funds are held in-house at both brokerages. Both platforms are part of large financial institutions that provide Securities Investor Protection Corporation (SIPC) and private excess insurance. Also, state-of-the-art fingerprint, face recognition, and two-factor authentication capabilities are available in mobile apps at both brokerages.
Security Verdict: Tie
Merrill Guided Investing and E*TRADE Core Portfolios use effective security with no differentiation between them. Your money is safe at either of these firms.
User Experience
Desktop
Both brokerage platforms are feature-rich resources available to clients who have opened a robo-advisor account. Each has a wide array of technical analysis tools as well as reports on fundamental measures. Both platforms have gone through years of customer feedback and refinement and are highly useful to the curious investor.
Mobile App
The mobile apps made available from these brokerages are both filled with useful features. E*TRADE’s mobile app was selected by Investopedia as the best for mobile users, where it was praised for being very similar to its desktop counterpart. Its organization and style make it a useful tool for the on-the-go investor.
While its technical research function is a bit less fluid, the Merrill app has a surprisingly beneficial aspect to its design. It is oriented around the “story” of an individual security. This thematic arrangement of information is less intimidating and creates rapid familiarity for the casual user or beginning investor.
Customer Service
Both brokerages offer multiple access points for customer service, and both have similar strengths and weaknesses. Customers who enjoy using the mobile apps or desktop version can get their questions answered in comprehensive FAQs and help centers. Phone access to customer service reps is also available for 24 hours per day at both robo-advisors.
Customer Service Verdict: Tie
Both Merrill Guided Investing and E*TRADE Core Portfolios lean heavily on the phone for tricky questions not covered in their comprehensive websites.
| Merrill Guided Investing | E*TRADE Core Portfolios | |
|---|---|---|
| Phone & Email Available | Phone, 888-637-3343, 24/7 | Phone, 866-484-3658, 24/7 |
| Pre-Funding Phone Consultation With a Certified Advisor | No | No |
| Online Chat Available | Yes (for customers in the platform) | No |
| Website FAQ Section | Yes | Yes |
Fees
Merrill Guided Investing
Merrill Guided Investing requires at least $1,000 to get started and has a management fee of 0.45%. The online-plus-financial advisor program requires $20,000 in your account and has a higher 0.85% fee. The Preferred Rewards program can lower fees if you qualify, bringing the management fee down from 0.05% to 0.15%. The higher your account balance with Merrill and Bank of America, the larger the discount on the annual fee. Merrill Guided Investing customers pay the underlying fees for the funds, with expense ratios ranging from 0.05% to 0.13% depending on the portfolio.
E*TRADE Core Portfolios
E*TRADE’s Core Portfolios accounts require at least $500 to open and have a management fee of 0.3%. In this fee structure, a $10,000 account would have an annual fee of just $30. Core Portfolios customers will also pay ETF expense ratios, which range from 0.05% for the Core offering to 0.14% for smart beta and 0.16% for SRI.
Fees Verdict: E*TRADE Core Portfolios
E*TRADE Core Portfolios charges less of a headline management fee and has low underlying expense ratios. That said, Preferred Rewards can change the fee picture for Merrill/Bank of America customers, as can a promotional six-month waiver of fees that Merrill Guided Investing currently has.
| Fees | Merrill Guided Investing | E*TRADE Core Portfolios |
|---|---|---|
| Management Fees for $5,000 Account | $22.50 | $15 |
| Management Fees for $25,000 Account | $112.50 (Plus Advisor $212.50) | $75 |
| Management Fees for $100,000 Account | $450 (Plus Advisor $850) | $300 |
| Termination Fees | No | No |
| Expense Ratios | Between 0.05% to 0.13%, depending on your allocation | Between 0.05% to 0.16%, depending on your allocation |
| Mutual funds | Dependent on portfolio | N/A |
The Bottom Line
Both Merrill Guided Investing and E*TRADE Core Portfolios are successful at simplifying investment decisions for those looking for a set-it-and-forget-it solution. Both offer well-constructed portfolios. E*TRADE Core Portfolio includes rules-based rebalancing for the purpose of keeping the allocations consistent with their recommended targets and tax-loss harvesting. Merrill Guided Investing offers situational rebalancing with the intent that it will optimize the performance of the portfolio. E*TRADE Core Portfolios offers lower costs and a better mobile experience for beginners with smaller accounts, while Merrill offers better goal planning.
The target customers for Merrill Guided Investing and E*TRADE Core Portfolios are customers who are already in their financial ecosystem. Looking solely at the robo-advisors misses the larger wrap-around ecosystem of services that the companies don’t need to bother replicating within the robo-advisor itself. This includes cash management, loans, net-worth analysis, and so on. If you are already with one of these firms, then its respective robo-advisor is the natural choice. If you aren’t, then it is worth broadening your search to other services with stronger goal-planning support and cheaper fees.
Is Merrill Guided Investing Worth It?
Merrill Guided Investing is worth it for investors looking for a way to automate their investments. Merrill offers situational rebalancing that will help you optimize the performance of your portfolio. However, if you have a low balance when opening your account, you’ll find the fees higher than other robo-advisor options (though the fees even out as your balance grows). Compare all the best robo-advisors before deciding which one is worth it.
How Do You Cancel Your E*TRADE Core Portfolio?
E*TRADE does not offer educational information on its website on how to cancel or close your Core Portfolios account. You can call E*TRADE Core Portfolio’s customer service department at 866-484-3658. A specialist should be available when a customer needs assistance.
How We Picked the Best Robo-Advisors
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. To collect data for our 2024 best robo-advisor awards and rankings, we sent a digital survey with 64 questions directly to each of the 21 companies we included in our rubric. Our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process took place from Jan. 8 to Feb. 9, 2024.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:
- Goal Planning – 21.00%
- Portfolio Contents – 17.00%
- Portfolio Management – 17.00%
- Fees – 15.00%
- Account Services – 10.00%
- Account Setup – 5.00%
- Customer Service – 5.00%
- Security & Education – 5.00%
- User Experience – 5.00%
Many of the companies we review for our projects grant our team of expert writers and editors access to live accounts so they can perform hands-on testing. Robo-advisor companies allowed us to do this, as well.
Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors. Read more about how we research and review robo-advisors.
The above material and content should not be considered to be a recommendation. Investing in digital assets is highly speculative and volatile, and only suitable for investors who are able to bear the risk of potential loss and experience sharp drawdowns. Digital assets are not legal tender and are not backed by the U.S. government. Digital assets are not subject to FDIC insurance or SIPC protections.
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