Merrill Edge - Platinum Honors

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Generator515
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Merrill Edge - Platinum Honors

Post by Generator515 » Thu Jan 11, 2018 11:52 am

Recently begun the shift of some assets to Merrill to take advantage of their rewards program. In two months I will be Platinum Honors.

Currently debating if it all should go there (from Fidelity) to simplify life. I could then buy Vanguard or Schwab or whatever ETF I wanted commission free.

I have seen alot of posts on here that people move the minimum to hit the tier and leave it at that. Outside of a love of vanguard was wondering if any reason for that before I initiate.

lack_ey
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Re: Merrill Edge - Platinum Honors

Post by lack_ey » Thu Jan 11, 2018 12:12 pm

Fidelity has a higher yielding settlement fund, better bond selection (including brokered CDs), no commissions on Treasury bonds, and different mutual funds available (including actually having money market funds).

Essentially, Merrill Edge is relatively bad for cash or near-cash allocations. Depending on holding period, you may want short-term bond ETFs or funds instead (but NTF fund selection is poor), though you'd eat bid/ask spreads on ETF trades.

If your account is purely for longer-term money I guess it's not much of a big deal other than potentially the worse bond/CD selection, though again if you're asking about simplification, maybe you wouldn't be interested in trying to optimize these things anyway.

Generator515
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Re: Merrill Edge - Platinum Honors

Post by Generator515 » Thu Jan 11, 2018 1:04 pm

Thank you. I am still in the accumulation phase so the near cash isn't as of a concern to me. I would either be in BND or SCHZ from a bond perspective.

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Re: Merrill Edge - Platinum Honors

Post by indexfundfan » Thu Jan 11, 2018 2:11 pm

Merrill Edge is great for ETF investing if you can qualify for commission-free trades. There is no restriction on which ETFs you can trade free.

Cash options are not great at Merrill Edge though. Nevertheless, in addition to using short term ETFs for liquid reserves, you can also request for the BIF Money Fund as the sweep fund. The yield is not great (currently 0.8% versus VG's 1.2% Federal MMF sweep) but at least it pays more than the default bank account sweep.
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Re: Merrill Edge - Platinum Honors

Post by neilpilot » Thu Jan 11, 2018 2:12 pm

I just transferred partial assets into 2 new ME accounts, keeping the rest at Scottrade. I definitely plan to consolidate to one firm, and expect to make that decision around mid-year. I'll base the decision on how I view working with ME in comparison to TDA. Scottrade account should all migrate to TDA by end of 1Q18.

I just transferred the assets in last week, but based on my initial contacts I think ME/BoA is way more cumbersome than Scottrade. For example, the POA to give me management rights to my spouse's account online was a breeze with Scottrade, and way too painful at ME.

Also, I still am not sure if ME can accept several Admiral class VG funds. Apparently the answer depends on who you ask.

Cash isn't an issue for me; I keep the bulk of my cash in CapOne MM and Ally CDs.

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Re: Merrill Edge - Platinum Honors

Post by triceratop » Thu Jan 11, 2018 2:23 pm

lack_ey wrote:
Thu Jan 11, 2018 12:12 pm
Fidelity has a higher yielding settlement fund, better bond selection (including brokered CDs), no commissions on Treasury bonds, and different mutual funds available (including actually having money market funds).

Essentially, Merrill Edge is relatively bad for cash or near-cash allocations. Depending on holding period, you may want short-term bond ETFs or funds instead (but NTF fund selection is poor), though you'd eat bid/ask spreads on ETF trades.

If your account is purely for longer-term money I guess it's not much of a big deal other than potentially the worse bond/CD selection, though again if you're asking about simplification, maybe you wouldn't be interested in trying to optimize these things anyway.
Doesn't Merrill Edge have no commission on brokered CDs and treasuries? Their language is "Price & yield as quoted". I have been curious about this for a while, so clarity would help.

As mentioned you can use the BIF money market fund, but I have found that is not possible in a Roth IRA at least. For taxable it works fine. One can always use something like ICSH [iShares ultra-short term bond ETF; I am not claiming it is the best option] which ensures you don't expose much money to subpar cash yields. I don't think this is a practical problem. Investing your Asset Allocation works.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Merrill Edge - Platinum Honors

Post by lack_ey » Thu Jan 11, 2018 2:54 pm

triceratop wrote:
Thu Jan 11, 2018 2:23 pm
Doesn't Merrill Edge have no commission on brokered CDs and treasuries? Their language is "Price & yield as quoted". I have been curious about this for a while, so clarity would help.

As mentioned you can use the BIF money market fund, but I have found that is not possible in a Roth IRA at least. For taxable it works fine. One can always use something like ICSH [iShares ultra-short term bond ETF; I am not claiming it is the best option] which ensures you don't expose much money to subpar cash yields. I don't think this is a practical problem. Investing your Asset Allocation works.
Yeah, the "as quoted" means they're taking a cut and thus reducing the effective yield, even on Treasuries.

Checking CUSIP 912796PQ6 (Treasury bill, maturity 7/12/2018), Merrill Edge quotes a YtM of 1.408%, while Fidelity shows 1.530%.

The most liquid near-cash ETF is probably PIMCO Enhanced Short Maturity Active ETF (MINT, ER = 0.35%, SEC yield = 1.69%), which trades about $50M a day with penny spreads on execution with a share price of $101.59 now. There's also iShares Short Maturity Bond ETF (NEAR, ER = 0.25%, SEC yield = 1.83%), trading about $30M a day with penny spreads on a share price of $50.15 now. I've noticed that MINT has tended to take more credit risk than NEAR. Both have duration about 0.5 years now. Oh, I guess iShares Ultra Short-Term Bond ETF (ICSH, ER = 0.08%, SEC yield = 1.72%) dropped the expense ratio sometime and has more AUM than it used to, but it's not quite as liquid.

Ultrashort muni bond ETFs are not as popular. Something like iShares Short Maturity Municipal Bond ETF (MEAR, ER = 0.25%, SEC yield = 1.52%) would seem to have a good tax-adjusted return but has AUM under $100M and more substantial spreads. There are larger funds with duration under 3 years, which are probably still appropriate for some uses.

Sure, you want to invest your asset allocation, but in general that could include cash or near-cash instruments, especially if you include emergency funds and other shorter-term savings as part of that. For most it's not going to be a huge amount of money and not that big a deal, though, unless you're looking for brokered CDs as a significant chunk of fixed income.

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Re: Merrill Edge - Platinum Honors

Post by triceratop » Thu Jan 11, 2018 3:19 pm

Thanks lack_ey. It looks like a rational call on a credit- and term-adjusted basis would be NEAR for funds held less than about 6 months and ICSH for funds held more than about 6 months, due to the differences in spreads and expense ratios. If I ever roll my own treasury ladder (probably not in the next 2-3 decades) it is good to know about the stealth commissions on adjusted yield.
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Re: Merrill Edge - Platinum Honors

Post by indexfundfan » Thu Jan 11, 2018 3:45 pm

I use MINT as cash in the IRA. Very very liquid, with a share price >$100 and a spread of $0.01.
For the taxable account, I transfer out any excess cash.
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deltaneutral83
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Re: Merrill Edge - Platinum Honors

Post by deltaneutral83 » Thu Jan 11, 2018 4:19 pm

Merrill has a great setup if you're fine to use ETFs which I think a significant amount do anyway. With $50k combined balance (which includes BofA accounts) you get free trades per month. At $100k, you are in line to get the free trades and also a great credit card (after 90 days) with BofA at 2.625% on every day purchases and 3.5% on dining/travel along with $500 sign up bonus. Merrill's current setup is not as heavily mentioned as the others (TDA/Schwab/Fidelity etc.) but it checks a lot of boxes for me personally. I certainly don't need the latest and greatest trading software nor anything else snazzy which I assume TDA and Schwab certainly do. The intro offer for Merrill is also the same if not better than the others (based off your initial funding amount), you just have to wait 180 days before they'll give it to you. I made the switch in my taxable after TDA's November "business decision." Total time spent moving from TDA to Merrill was probably 75-100 minutes, very little hassle.

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Re: Merrill Edge - Platinum Honors

Post by Earl Lemongrab » Fri Jan 12, 2018 6:36 pm

I have significantly more than necessary for the level. Part of that is from transfer bonuses, but I also just like them as a brokerage.
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Re: Merrill Edge - Platinum Honors

Post by stlutz » Fri Jan 12, 2018 7:36 pm

Actually the safest almost-money-market ETF would be SHV (ishares Treasury < 1 year). Currently yields 1.24%.

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Re: Merrill Edge - Platinum Honors

Post by lack_ey » Fri Jan 12, 2018 7:56 pm

stlutz wrote:
Fri Jan 12, 2018 7:36 pm
Actually the safest almost-money-market ETF would be SHV (ishares Treasury < 1 year). Currently yields 1.24%.
Okay, if you really want to minimize rate and credit risk, there's SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL). SEC yield 1.07%.

Coincidentally it actually returned more than SHV in the last year.

I think most people would be okay with a bit of credit risk (if you're not going to have stable NAV anyway...), but I guess these are legit options.

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Re: Merrill Edge - Platinum Honors

Post by triceratop » Fri Jan 12, 2018 7:58 pm

stlutz wrote:
Fri Jan 12, 2018 7:36 pm
Actually the safest almost-money-market ETF would be SHV (ishares Treasury < 1 year). Currently yields 1.24%.
Correct, in that a money market is not 'safe'.

Edit: as lack_ey notes, just use T-bills then.
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Re: Merrill Edge - Platinum Honors

Post by bgf » Fri Jan 12, 2018 8:02 pm

deltaneutral83 wrote:
Thu Jan 11, 2018 4:19 pm
At $100k, you are in line to get the free trades and also a great credit card (after 90 days) with BofA at 2.625% on every day purchases and 3.5% on dining/travel along with $500 sign up bonus.
whaaaat?! i had no idea it was that good. im doing that. thanks!

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Re: Merrill Edge - Platinum Honors

Post by lazyday » Sat Jan 13, 2018 3:57 am

triceratop wrote:
Thu Jan 11, 2018 3:19 pm
It looks like a rational call on a credit- and term-adjusted basis would be NEAR for funds held less than about 6 months and ICSH for funds held more than about 6 months, due to the differences in spreads and expense ratios.
Have you tried to estimate how much of the spread you are paying?

I’ve been quite happy with my ETF trades. For example, by etf.com data, if you buy VGSH at the ask and sell at the bid, you lose 2 basis points. Using small mixed lot market orders, I probably have paid less than 1 basis point per round trip on average. It wouldn’t surprise me if it's only a half a bp. I haven’t kept track, but do look after each trade. As I recall, my executions are sometimes at the bid/ask midpoint, and rarely worse than .5 cents from the midpoint even if the spread is 2 cents. If I average ¼ cent per trade, that’s under 1 bp on a round trip.

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Re: Merrill Edge - Platinum Honors

Post by lazyday » Sat Jan 13, 2018 4:03 am

In exchange for free trades, I don’t try to collect every possible dollar of interest. If my cash balance is well under $1000, I’m likely to leave it alone.

Here’s some low ER Treasury funds from this thread, from cash to short term. YTM seems low, maybe not current:

http://www.etf.com/BIL
market-weighted index of all publicly issued zero-coupon US Treasury bills with a maturity of at least 1 month, but less than 3 months
Duration0.17
Yield to Maturity0.69%
Expense Ratio0.14%
Average Daily $ Volume$31.31M
Average Spread (60-Day)0.01%

http://www.etf.com/SHv
market-weighted index of debt issued by the U.S. Treasury. Remaining maturity must be 1-12 months
Duration0.37
Yield to Maturity0.92%
Expense Ratio0.15%
Average Daily $ Volume$78.07M
Average Spread (60-Day)0.01%

http://www.etf.com/SHY
market weighted index of debt issued by the US Treasury with 1-3 years remaining to maturity
Duration1.89
Yield to Maturity1.28%
Expense Ratio0.15%
Average Daily $ Volume$97.58M
Average Spread (60-Day)0.01%

http://www.etf.com/VGSH
market weighted index of fixed income securities issued by the U.S. Treasury… with maturities of 1-3 years (agency bonds were included until recently)
Duration2.00
Yield to Maturity1.30%
Expense Ratio0.07%
Average Daily $ Volume$11.18M
Average Spread (60-Day)0.02%

I’ve been using VGSH lately. Maybe when I expect to hold for under a month, I’ll use SHV since it’s more liquid. I also have a slight preference for the shorter duration.

I’ve also used VCSH ST Corp, which is quite liquid in normal times but might trade below NAV in a crisis. Of course, it is not cash.

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Re: Merrill Edge - Platinum Honors

Post by triceratop » Sat Jan 13, 2018 2:05 pm

lazyday wrote:
Sat Jan 13, 2018 3:57 am
triceratop wrote:
Thu Jan 11, 2018 3:19 pm
It looks like a rational call on a credit- and term-adjusted basis would be NEAR for funds held less than about 6 months and ICSH for funds held more than about 6 months, due to the differences in spreads and expense ratios.
Have you tried to estimate how much of the spread you are paying?

I’ve been quite happy with my ETF trades. For example, by etf.com data, if you buy VGSH at the ask and sell at the bid, you lose 2 basis points. Using small mixed lot market orders, I probably have paid less than 1 basis point per round trip on average. It wouldn’t surprise me if it's only a half a bp. I haven’t kept track, but do look after each trade. As I recall, my executions are sometimes at the bid/ask midpoint, and rarely worse than .5 cents from the midpoint even if the spread is 2 cents. If I average ¼ cent per trade, that’s under 1 bp on a round trip.
I was measuring tradeability only via the size of the spread on recent trading days. Of course, if one uses non-market orders things may be different.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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