Posted by William Charles on December 9, 2019
Misc

Published on December 9th, 2019 | by William Charles

46

Bank of America/Merill Edge To Remove Commissions On Stocks, ETFs & Options For Everybody

Update 12/9/19: This has now been expanded to all Merrill Edge Self-Directed Clients. Hat tip to @HH_Cash

Original post: Bank of America/Merrill Edge has announced that Preferred Rewards members will now no longer have to pay commission on stocks, ETFs and options. Earlier this year they added a limited number of free trades but this latest move is likely in response Charles Schwab removing commission which caused an avalanche of competitors to follow (TD Ameritrade, E*Trade, Ally & Fidelity). Non preferred members will have the cost reduced to $2.95 per trade.

Hat tip to CNBC via readers Lightspeed & John R



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International Churner
International Churner

I guess this really doesn’t matter, they’ll just make up for the lost revenue by lowering the cash sweep interest rate, and selling order flow data.

Lightspeed
Lightspeed

Among the big brokers, they will probably lose the least, because over 3/4ths of their trades were already free with PR.

Jay
Jay

Merrill Edge does not do PFOF at present.

International Churner
International Churner

Well spotted, I thought pretty much everyone had jumped on the HFT bus at this point, but BofA and ML both don’t have any Rule 606 disclosures filed.

Kid Lightning
Kid Lightning

Could someone explain what PFOF and what a Rule 606 is?

Jay
Jay

Look up payment for order flow. It’s a way for brokerages to get revenue from directing trades to market makers. You have to disclose this when its’ done.

Anon
Anon

And no one seems to notice or care that never in the history of the US stock market has no trade fees to purchase trades have ever been offered to the general public.

WhereMyFreeStuffVanguard
WhereMyFreeStuffVanguard

Now if Vanguard can only get on this hype train, my life would be perfect.

SamL
SamL

Vanguard has been on the free/cheap train for over forty years.

TheJstandsforJ
TheJstandsforJ

Except in re to free trades. The funds themselves are cheap and extremely high quality though. Owning VG ETFs at other firms is going to become the norm for me. Their website and service aren’t great.

SamL
SamL

Vanguard has had free ETF trades for a while (not individual stocks though, but who cares about that), and long before these recent newcomers to free ETF trades.

There’s really no big difference in website and service. That’s not something that distinguishes brokerages.

James
James

Getting free trades is really no longer a benefit, as all the big players offer them now. Going to be interesting to see whether Preferred Rewards members get a new benefit; the only valuable one is the credit card boost.

Chucks
Chucks

I like the free safe deposit box, Platinum and higher.

toddo
toddo

If BoA takes away the free box, I’m gone.

toddo
toddo

Free box and Cash Reward online 5.25% is the only reason i’m with BofA. They have the best multiplier for top tier. Now if they followed chase and allowed combining points across all their bank credit cards, I would move everything there.

ritholtz
ritholtz

I am thinking about moving IRA from Scwab to BoA to take advantage of promotional offer. Do we get free safe deposit box as well?

MisterBill
MisterBill

If you get to the appropriate rewards level you will.

Mr G
Mr G

I would love to see the Premium Rewards card add lounge access. Even if it was just a couple of visits per year. Perhaps they could tie the benefit to a members Preferred Rewards status.

SamL
SamL

I’m sitting in my lounge room at home for free. I’m like 99% of people who will never see the inside of an airport lounge. I’d hate for features like this to be added at the expense of good features like high cashback.

Mr G
Mr G

I keep forgetting the Premium Rewards card is a different card than the usual “travel” cards and thus ultimately that’s why B of A never added travel perks such as lounge access. However the trip protection insurance is pretty handy and saved me from buying it separately on my last few flights. Enjoy your lounge room and have a cold one on me.

MisterBill
MisterBill

But it does include $100 in incidental travel charges like baggage fees, and free Global Entry. So it’s definitely a travel card, just a lower end one.

What’s really different is the annual fee. Are there any at the $95 price point that offer lounge access?

KM
KM

They are always the last do things.
Be a leader not a follower.

BrokerMania
BrokerMania

They had free trades for Preferred members for years lol

SamL
SamL

They already had 100 free trades per month. I don’t even need 100 free trades per decade. So they already had waaay more free trades than I could ever possibly need, so effectively unlimited, long before all these others caught up.

Also Vanguard started free ETF trades long before these others.

Also these latest changes weren’t started by Schwab, as they were actually reacting to IB.

Lance
Lance

Do a 401k and HSA count towards the amounts required in the rewards program? I recently quit my job and I want to transfer my accounts. I have been looking at here or Schwab.

Dmoa
Dmoa

Yes ira can be used to count towards the req amounts

joE
joE

Lance 401k yes, HSA no.

Burton

401k yes? I had looked into that earlier this year and thought IRA yes, 401k no, HSA no.

Burton

joE I suppose if he just quit his job the 401k would be rolled into an IRA, is that what you meant as opposed to an active 401k at BoA/ML?

joE
joE

Burton exactly. I said 401k as to not confuse OP, but when all said and done 401k is the same thing as an IRA when it comes to counting towards preferred membership.

SMan
SMan

I think they should remove or at least reduce the annual fee or add extra benefits for Preferred Rewards members on Credit cards, Specially on Premium Rewards card.

SamL
SamL

The AF is arguable already effectively zero. And you get unlimited 2.625% cashback on everything. I’d hate for them to mess with it if it means reducing the good features.

SMan
SMan

I mean reduce the fee on other cards. For Premium Rewards card add extra benefits.

debit
debit

Preferred rewards is shit. I can’t get a free locker in the branch near me. Now everyone gets the free commissions. That leaves only the extra bonus on credit cards.

SamL
SamL

BoA cash back is the best out there.

grrizzly
grrizzly

“$0 option trades are subject to a $0.65 per-contract fee.”
Just to make it clear.

Mar
Mar

Well hopefully they add some more value to the preferred rewards program then

Newbie
Newbie

BoA is very sneaky. They approved my Virgin card but reduced my premier card limit to only $5k, without any communication. I almost touched the limit, I called them back to put all the limits back.
Their online payment is also sneaky. Their autopay does not work if E-bills are not ON, even if the page shows ‘Autopay ON’. I found out after calling technical help. They would not waive off the interest fee too, only late fee.

Banks love to churn.

Jay
Jay

Well Finally..I was waiting for this…I really like the instant transfer function of BOA

Kim
Kim

.

Qi
Qi

I have been using Merrill Edge for about 2 years because of the free trades from Preferred Rewards. I have some complaints about stock trading on Merrill Edge: each and every order requires getting a text message authentication code; some penny stock type of orders require review and these reviews might take minute or more, which is much slower than I’ve seen at other online brokers; stop limit orders have max size of 10k shares; there is no way to search by symbol for trade confirmations for past years.

Steve

They also don’t let you buy some stocks, such as GBTC. I don’t use Merrill Edge for trades, just their opening/transfer bonuses and as a way to qualify for Preferred Rewards to get higher rewards on BofA credit cards.

Al
Al

but you do have to keep 100k there all the time, to keep the elevated status, right? it would be a shame not to invest all that cash

Steve

Yeah; I transferred stocks there from another brokerage. Actually I might’ve made a couple trades there, e.g., to reinvest dividends, and I don’t think they’re that bad; but with other brokerages also having free trades and less restrictions, I don’t see a reason to do more trading at Merrill.

CK
CK

Wells Fargo did the same today

Chuck

Posted now, thanks

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