For some investors, such as ones who are interested primarily in stocks or ETFs, this may be a fine brokerage. But Merrill Edge doesn't seem to recognize that mutual funds are something different.
It seems to be stuck in the 80s, before fund supermarkets existed and when brokers processed trades only in whole shares. WIth Merrill Edge, one cannot specify a fractional number of shares of a fund to sell. One cannot transfer fractional shares, even between internal ME accounts (e.g. for a Roth conversion). Monthly statements report positions in whole shares, though the fractional amount does appear as a note in the position description as if it were the result of a DRIP purchase.
Even the way it handles closing out a position feels like the way an ETF or stock position might be handled. From a recent communication with ME:
"If you transfer all whole shares of a position out of your account, the fractional shares should liquidate automatically during the third week of the month
. This is contingent
upon the aggregate sum of fractional shares in our inventory being sufficient to total at least one whole share."
Once a month!? If you're lucky? Sounds like Sharebuilder's investment plan
that trades only on Tuesdays.
It lists many funds having a $0 min for additional investments, but the website does not accept amounts under $1. For stocks that trade in whole shares, that doesn't matter (except for penny stocks, and ME blocked a test trade of the penny stock SHLDQ). But it does matter for mutual funds that trade with a granularity as small as one cent.
In one sense (dollars involved) none of this is a big deal. In another sense it's significant - rather than making mutual fund operations easy, it forces the investor to conform to its way of handling mundane requests. That's not fund-friendly.