If you're looking to open a brokerage account with a high-powered trading platform, Merrill Edge vs. Vanguard may not give you a clear winner.
A Vanguard brokerage account isn't designed for frequent traders. It makes sense given Vanguard's roots as a broker for long-term investors who are most concerned about cost.
Vanguard uses a simple browser-based interface. Traders can easily buy stocks, options, ETFs, or funds. That said, Vanguard isn't the brokerage for you if you want complex stock option trades or level II quotes. Its mobile app is good enough to place the occasional buy or sell order. But it doesn't offer full platform functionality. The app is available on iOS, Android, Windows, and Kindle Fire.
Merrill Edge offers more functionality with its browser-based solution. You can get streaming quotes through its watch list feature. Merrill Edge MarketPro®, its desktop platform, is a more powerful solution. You get full customization with this trading tool, as well as more charting options, and many ways to show multiple data points on one screen. You can quickly see a stock's P/E ratio, or analyst estimates, for example.
Merrill Edge vs. Vanguard: International stocks and ADRs
Before you ask Siri how to say "limit order" in Spanish, know that you can trade American depositary receipts (ADRs) at Vanguard and Merrill Edge. If you are a trader who wants direct access to a foreign stock market, Vanguard can get you there, but it charges a fee. Merrill Edge doesn't offer international market trading.
Most large foreign companies have an ADR that trades in the United States. Buying shares of international household name companies shouldn't be a problem, regardless of the brokerage you choose. But if you want to buy shares of a Japanese small-cap stock, you'll need a broker that can help you transact on a Japanese stock exchange.
Merrill Edge and Vanguard each offer their brokerage clients a high-quality trading tool and a wealth of research. Both provide a number of screening tools for individual stocks and funds. Vanguard customers get access to excellent resources, market insights, economic analysis, and in-house Vanguard research.
Merrill Edge customers get one very big perk in the form of Bank of America Merrill Lynch Global Research Analysts' stock picks. Merrill Edge also offers third-party research to its clients. The "story" Merrill Edge offers about many of the largest stocks on the market is a helpful function. It gives you a quick introduction to a given stock before you do your own due diligence.
When it comes to human professional help, Merrill Edge vs. Vanguard are more or less on an equal footing. In addition to sophisticated website trading guidance, you can access a financial advisor at either brokerage. Investment advice from a person does not come free. Fees depend on how much money you want help managing. The Vanguard Personal Advisor annual service fee is 0.30% of the managed assets. The Merrill Guided Investing annual service fee is between 0.45% and 0.85% of the managed assets and is assessed based on your balance each month. Minimum balances apply.
Vanguard vs. Merrill Edge: The bottom line
If you want to invest in a wide range of low-cost U.S. and international stock and bond index funds and ETFs, Vanguard might just win your heart. It easily earns a top spot as one of the best online brokers for long-term investors who want to simply manage a portfolio of a few index funds and ETFs.
Of course, if low options costs or highly rated apps and trading platforms are what you're seeking, then Merrill Edge may be a better fit.