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Ally Invest Advisors Review

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Ally Invest Advisors

Ally Invest Advisors is a fee-only financial advisor firm that does all of its business through an online investing platform. The firm handles $126 million in assets under management (AUM) and employs eight advisors.

Low- to mid-net-worth individuals make up the lion’s share of Ally Invest’s client base, with high-net-worth individuals and businesses coming occupying a smaller share of the firm’s focus. The services at Ally Invest revolve solely around portfolio management, as financial planning is nonexistent here.

Ally Invest Advisors Background

Ally Invest Advisors is wholly owned by Ally Invest Group, Inc., which in turn is under the ownership umbrella of Ally Financial, Inc., an online financial services company that specializes in banking. Therefore, even though Ally Invest Advisors is a fairly new branch of Ally Financial, its roots can be traced back to 1919.

The advisory leadership group at Ally Invest Advisors averages 18 years of experience in the financial services industry, and it includes one chartered financial analyst (CFA).

What Types of Clients Does Ally Invest Advisors Accept?

Ally Invest Advisors has a client base made up almost entirely of non-high-net-worth individuals. However, the firm’s clientele does include high-net-worth individuals and businesses.

Ally Invest Advisors Minimum Account Size

To become a client of Ally Invest Advisors, you’ll need to deposit at least $2,500 in your new client account.

Services Offered by Ally Invest Advisors

The array of services available through Ally Invest Advisors centers exclusively around investment portfolio management. On the other hand, Ally does not provide any financial planning services. Check out everything the firm has to offer below:

  • Professional portfolio management
    • Discretionary service
    • Customized, risk-adjusted investment planning
    • Question-based investor profiling
    • Specific investment recommendations
      • Available as a PDF
  • Brokerage services through Ally Invest Securities
  • Wrap-fee program

Ally Invest Advisors Investment Philosophy

Ally Invest Advisors hinges its investment philosophy on Modern Portfolio Theory (MPT), which holds that rather than just picking individual stocks, investors can create diversified portfolios that will deliver optimal returns given their particular tolerance for risk. MPT is about landing upon intelligent investment decisions whenever an investor takes on increased risk. More specifically, an advisor using this theory will only take on an uptick in risk when the associated returns are equally as valuable.

In order to satisfy the risk requirements of every client it works with, Ally Invest has developed portfolios for each tier of risk tolerance. These strategies include ample diversification across asset classes, market sectors and geographical locations, another hallmark of MPT. Exchange-traded funds, or ETFs, are the core of every portfolio strategy Ally creates, as they possess inherent diversification in a specific area of the market. Depending on your risk tolerance, your assets may be invested in stocks and bonds as well.

Ally will generally leave around 2% of each client’s assets in his or her account uninvested. This is done for a number of reasons, such as liquidity maintenance and for rebalances. Holding some of these funds also allows the firm to charge management fees without selling any of your investments.

Fees Under Ally Invest Advisors

In alignment with its overarching theme, Ally Invest Advisors maintains a simple wrap-fee schedule that charges a flat 0.30% annual fee on all balances above its minimum of $2,500. This fee is divided into monthly payments that are charged in arrears.

Ally Invest Advisors Fees
Assets Under Management Annual Fee
$2,500 and up 0.30%

All fee arrangements at Ally Invest Advisors are negotiable, though this is entirely up to the discretion of the firm on a client-to-client basis. The dollar amount that’s used to calculate these charges is the combined average daily balance of your account during the corresponding month.

Check out the table below to see how Ally’s fees for its management services compare to those at similar financial advisor firms. Note that these fees are only estimates and actual costs may vary.

*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.
Estimated Fee Comparison*
Your Assets Ally Invest Advisors National Median Advisory Fees**
$500K $1,500 $5,000
$1MM $3,000 $8,500 - $10,000
$5MM $15,000 $25,000 - $32,500
$10MM $30,000 $50,000

What to Watch Out For

Ally Invest Advisors lacks the in-person meetings that competing financial advisor firms consistently offer. While this may be preferential for some prospective clients, it’s worth evaluating how important this attention would be to you prior to joining up.

Financial advisor firms customarily provide both investment portfolio management and financial planning as a combined set of offerings. At Ally Invest Advisors, you will not have access to financial planning or any goal-related advice.

Disclosures

According to its SEC-filed Form ADV, Ally Invest Advisors has a clean legal and regulatory record.

Opening an Account With Ally Invest Advisors

Unlike many advisory firms that operate on normal business hours, clients of Ally Invest Advisors can reach the company 24 hours a day, seven days a week through (855) 880-2559. If you prefer it, clients may also use Ally’s chat service to speak to an account manager online.

Where Is Ally Invest Advisors Located?

It’s important to note that Ally Invest Advisors does not run any physical, customer-facing locations. With that being said, the firm’s headquarters is in Charlotte, North Carolina at 11605 North Community House Road, Suite 300.

Tips for Your Investment Taxes

  • Taxes can sometimes take a larger bite out of your returns than expected, making it helpful to estimate these charges before you have to pay them. SmartAsset’s capital gains tax calculator will simplify this process. In fact, all you need to know is your annual income, filing status, address and about how much you expect to earn on your investments.
  • Financial advisors and their firms often boast some level of experience with taxes, investing and the ways in which these two topics combine. The SmartAsset financial advisor matching tool asks you to answer a short questionnaire regarding your personal financial situation and your financial goals for the future. Once you complete this, you’ll be paired with up to three advisors in your area.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about cost of living in retirement there.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology SmartAsset calculated the average cost of living for retirees in the largest U.S. cities. Using that calculation, we determined how many years $1 million would last in retirement in each major city.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors throughout the country. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%, reflecting the typical return on a conservative investment portfolio. Finally, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would last in each of the cities in our study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research