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Ally Invest Review

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by Lauren Perez Updated
Ally Invest

Ally acquired TradeKing and rebranded the investment service as Ally Invest back in 2016. Since then the service has grown and today is one of the heavy-hitters in the online investment space.

Ally Invest offers a few different options for its investing customers, one of which is a self-directed trading account. These accounts are for more hands-on investors who want to be more involved in their own investment decisions. This means that you can build your portfolio however you like with a variety of futures, forex, mutual funds, stocks, bonds, ETFs and options to choose from.

If you’re trading stocks and ETFs, it costs a $4.95 commission. For options trades, the commission is $0.65 per contract, plus a $4.95 base. However, if you maintain an average daily account balance above $100,000 or exceed 30 trades per quarter, there are discounted commissions as follows: $3.95 for stock and ETF trades and $0.50 per contract, plus a $3.95 base. 

If you’re new to investing or simply don’t want to manage an investment portfolio, Ally Invest also offers managed portfolios. This option gives you the opportunity to hand the reins of your portfolio to experts. They will take your goals and financial situation into account to tailor your portfolio. Plus, as times change, your account will automatically be rebalanced and adjusted so your returns always reflect well, no matter what the market may look like.

You'll also have access to financial tools and education. That way you can learn more about investing to make better investing decisions on your own. 

Best for

Offering both the self-directed trading account and the managed portfolios account means that anyone can open an account whether you're an investing pro or a total newbie.

Drawbacks

You must have an account balance of at least $2,500 to begin investing with a managed portfolios account. So if you're looking to start small and ease your way into investing, this robo-advisor may not be for you.

Pricing: How Much Does Ally Invest Cost?

Option Name Management Fee Minimum Balance Features
Self-Directed Trading $4.95 for Stock and ETF Trades + $0.65 per option trade contract, $1 per bond $0 Hands-on investing, Wide variety of investments to choose from, Ability to stay on top of the market with live updates
Ally Invest Managed Portfolios 0.30% $2,500 Professionally designed personalized portfolios, Automatic rebalancing

Self-Directed Trading

Management Fee
$4.95 for Stock and ETF Trades + $0.65 per option trade contract, $1 per bond
Minimum Balance
$0
Features
Hands-on investing, Wide variety of investments to choose from, Ability to stay on top of the market with live updates

Ally Invest Managed Portfolios

Management Fee
0.30%
Minimum Balance
$2,500
Features
Professionally designed personalized portfolios, Automatic rebalancing

How much you pay for an Ally Invest account will depend on the kind of account you choose to open. Self-Directed Trading accounts come with a price of $4.95 for stock and ETF trades. Option trades cost 65 cents per contract, on top of a base cost of $4.95. 

However, should you make 30 or more trades per quarter and/or maintain a balance of more than $100,000, there's volume/balance pricing. At this level, stock and ETF trades will cost $3.95 while options will cost that plus 50 cents per contract. Bonds, though, will always cost $1 per bond trade.

A managed portfolio comes at a set annual price. The annual fee is 0.30% of your account balance. You pay this fee in monthly installments. For example, if you have an account balance of $21,000, your monthly payment would be a mere $5.25, or $63 per year. You won’t pay any additional trading fees with this account.

Other fees you can see include for no load mutual funds at $9.95, certificates of deposit at $24.95 per transaction and a number of service fees for certain transfers and transactions like returned checks and IRA transfers. 

Ally Invest's Investing Strategy

No matter whether you choose a self-directed trading account or a managed portfolios account, Ally Invest promises to provide you with low-cost funds. This means that your money is allowed to grow without getting hit by too many trading fees. Ally Invest will take into account your own personal goals, whether you’re saving for retirement or buying a new house. It will also look at how much risk you’re willing to take when it comes to investing in the market. 

Ally Homepage

If you go the self-directed trading route, you can trade stocks, bonds, ETFs, futures, foreign exchange funds, options and mutual funds yourself. You'll enjoy low trading prices and low commission fees, plus no account minimum balance. Plus, you have access to tools to stay on top of the market and best calculate your trading moves. You also have 24/7 customer service and professional brokers at your reach.

If managing your own investments isn’t quite your thing, you could go for a managed portfolio. This places your portfolio in the hands of Ally Invest and its investing technology. Once Ally has assessed your savings and investing goals, you’ll receive recommendations for what your portfolio should look like. Your portfolio will also be rebalanced regularly by the company's technology. 

Your portfolio will consist of a wide range of diversified low-cost index funds. Ally Invest will take into account your tolerance for risk, but you can change your settings at any time. You may also make additional deposits into your account to increase your investments. 

Supported Accounts

  • Individual and Joint accounts
  • IRA
  • Roth IRA
  • SIMPLE IRA
  • SEP-IRA
  • Rollover IRA
  • Trusts
  • Business Accounts

Unsupported Accounts

  • 529

Key Features

Certainly a key feature is the opportunity for any kind of investor to open an account. Those more experienced with investing can open a self-directed account so they can manage their portfolio more directly. On the other hand, those who are new to investing, or don’t have the time to craft their own portfolio, can also open a managed portfolio. This opens up investing to more people.

Ally offers a wide variety of investments to make your portfolio diverse and secure. You can choose from stocks, bonds, mutual funds, ETFs, options and more. If you have Ally manage your portfolio, it will ensure it tailors your investment mix to you and your savings goals. It employs research and tools to make sure your portfolio reflects you. Plus, as the market, your goals and your timeline change, it will adjust and rebalance your investments as necessary. 

Ally Charts

Plus, no matter which account type you choose, Ally Bank will keep you informed and educated about investing. You gain access to a number of tools, articles and advisors to help you understand investing and make better investment decisions. Tools include streaming charts, a profit/loss calculator, a profitability calculator, watchlists, market data and options chains.

As an entirely online bank, there's the convenience of a mobile app across multiple platforms and an easily accessible website. That way you can access your account to view your portfolio, make trades or learn more about investing just about anywhere and at any time. This doesn’t lessen the service's security or integrity. Ally Invest Securities, LLC is a member of the Securities Investor Protection Corporation. This provides protection on your accounts up to $500,000. Ally Invest provides additional coverage of up to $37.5 million, including up to $900,000 in cash with an aggregate cap of $150 million. Plus, it promises a secure connection when accessing and managing your accounts. 

Who Ally Invest Is For

 With its two types of accounts, self-directed trading and managed portfolios, Ally Invest opens up its services to almost any kind of investor. If you want to be more hands-on with your portfolio, you can open a self-directed trading account. That way you can choose your own investments. You can invest and trade as you see fit, according to your savings goals and willingness for risk.

However, if you don’t quite have the experience or time to manage your own portfolio, you can open a managed portfolios account. That way you can put your investments and savings into the hands of experts. You also have access to a ton of educational material, if you want to learn more about investing. You do have to have a balance of at least $2,500, in order to begin investing with a managed portfolios account. So if you’re not comfortable with that sum, you may have to look elsewhere.

Available Features

  • Automatic Rebalancing

Unavailable Features

  • Tax-Loss Harvesting
  • Direct Indexing
  • Fractional Shares
  • Human Advisors

How Ally Invest Works

Depending on which kind of account you choose to open, Ally Invest works slightly differently. For its managed portfolios accounts, it starts by analyzing your investing and savings goals. It takes into account your age, what you’re saving for and your investing strategy, including how much risk you’re willing to take on. From there, it can begin making the most appropriate portfolio for you.

Its tools look through thousands of ETFs and its website provides information on ETFs including the risks they can pose. This information may help you make a more informed decision about whether a managed portfolio is right for you. After the original setup of your account, Ally Invest will continue to monitor your portfolio. It will automatically rebalance and adjust your investments as needed when changes come along. Some such changes include market fluctuation or your ideal retirement age, if you’re saving for retirement. Account monitoring and rebalancing is done through technologies and not by actual advisors. You may also make additional deposits into your account to increase your investments. 

Ally Dashboard

A managed portfolio comes with an annual fee of 0.30% of your account balance. This is comparable to the fees charged by other robo-advisors. To actively invest with managed portfolios, you will need an account balance of at least $2,500. However, there is no minimum required to simply open the account. You may open your account as an individual account, joint, traditional IRA, Roth IRA, IRA rollover or a custodial account. 

Then there is the self-directed trading account. Rather than put your investment portfolio into the hands of Ally’s system, you get to call your own shots with help from its tools and information. You do your own trading of stocks, options, ETFs, mutual funds and bonds with a self-directed trading account. 

One tool that would be available to you is streaming charts. These different types of charts allow you to study and analyze how certain investments are performing. You can even customize this tool so you can better see what you’re most directly interested in. A profit/loss calculator can help you calculate the loss or profit you could see from a trade before you make it. You can also create your own watchlists to keep an eye on groups of securities. Ally Invest offers a number of other tools and educational materials to help you make the best decisions when it comes to your portfolio.

Since you are managing your portfolio yourself, you won’t have to pay an annual fee to have your account managed. Instead, you pay trading fees yourself, but Ally offers low trading fees. Stock and ETF trades will cost $4.95. Option trades will cost the same base amount, plus 65 cents per contract. If you make 30 or more traders per quarter and/or maintain an average daily balance of more than $100,000, you can pay $3.95 for stock and ETF trades, and a $3.95 base plus 50 cents per contract for an option trade. Bonds always cost $1 per bond.

No matter which account type you choose, you’ll have access to Ally’s website and mobile apps. You can make changes and trades no matter where you are. You also have 24/7 access to customer service representatives and brokers to help with any questions or concerns you have, whether it’s about your account or investing strategy.

What’s the Catch?

Every robo-advisor is going to be different, especially depending on what services they offer. In this case, Ally Invest takes the term robo-advisor to heart since you and your investment portfolio aren’t automatically seen and assessed by a human advisor. Your portfolio is mostly managed by its tools and online systems. Every rebalance is done with technology rather than an advisor looking at your account.

Of course some investors may not mind this system. But others may want a more personal experience when it comes to their portfolio and rebalancing. That isn’t to say that you cannot contact an advisor. You do have 24/7 access to customer service representatives and brokers. You can reach them by phone, by email or through an online chat. These brokers can help you understand investing, make better investing decisions and manage your account.

When it comes to a managed portfolios account, you will need a minimum of $2,500 in your account to begin investing. This is not an exorbitant minimum, but it may be a deal-breaker for some who hoped to ease into investing with a smaller sum.  

Ally Invest has proven to be a useful tool for all types of advisors, whether you want to be hands-on with your investments or not. But as helpful and convenient as a robo-advisor like Ally Invest can be, working entirely online isn’t always the right move for every investor. With Ally Invest, you’ll have to be comfortable not having immediate access to your own personal advisor. You also won’t have a human advisor looking over your portfolio to rebalance it or make changes according to sudden changes in your financial situation. Rebalancing with Ally Invest is automatic. For other changes, you’ll need to log in to your account to update your information manually. 

It’s this lack of human interaction and participation that drives many investors to work with an in-person advisor instead. Working with a human advisor allows you to explain your financial situation and goals more clearly and, from that, build an even more personalized investment portfolio. This becomes especially helpful when strategizing for your unique financial situation. For example, an advisor can better help you plan to send your three kids to college and move into a new home than a robo-advisor algorithm can. 

If you think you’d like to work with an in-person financial expert, SmartAsset can help you find the right advisor. We’ll connect you with an advisor who works in your area. To start, you’ll answer a few questions to help us figure out what you want and need from a financial advisor. This includes your retirement plans, investment goals and current financial situation. We’ll take into account your personal preferences, too, like if you specifically want to work with a female advisor. Next, we’ll show you three advisors who match your preferences. You can then use our online tools or concierge service to book an appointment with an advisor. When choosing a financial advisor, it can help to meet with multiple advisors. That way you can really get a feel for which advisor you’ll work best with. 

Competition: How Ally Invest Stacks Up?

Of course, Ally Invest isn’t the only robo-advisor who offers investment products to all sorts of investors. Its low prices put it in competition with some big financial names like E-Trade and Merrill Lynch. 

E-Trade’s similar offering is its Core Portfolios, what it calls an “automated advisory solution.” E-Trade also guarantees diversified ETF portfolios at the same annual price of 0.30% of your account balance. However, you need double the minimum account balance that Ally Invest requires, with E-Trade requiring at least $5,000.

Like Ally Invest, E-Trade Core Portfolios employs technology to monitor and rebalance your portfolio. You do have access to customer service and advisors but the managing is mostly done with technological systems.

Merrill Lynch offers a more expensive alternative to Ally Invest and E-Trade Core Portfolios with Merrill Edge Guided Investing. Merrill Edge Guided Investing provides more of a choice than E-Trade does, with products available to different kinds of investors whether hands-on or not. When you choose to trade and invest online yourself, you will see a higher price of $6.95. There is an opportunity to qualify for $0 trades, though, with preferred rewards. If you choose to go with Merrill Edge Guided Investing, you will also see a higher annual fee and minimum balance requirement of 0.45% and $5,000 respectively. This option allows you to invest online and benefit from professional advice and management. 

Merrill Edge also offers the Merrill Edge Select? Portfolio, a more advanced type of managed portfolio. You can be as risky as you want with this investment portfolio. This option charges an annual fee of 0.85% of your account balance. There is a steep minimum account balance requirement of $20,000. However you get to meet with a Merrill Edge Financial Solutions Advisor™ at least twice a year. 

Robo-Advisor Management Fee  Minimum Balance  Best For
0.30%  $2,500
  • Both first-time and experienced investors
 
  0.30%  $50,000
  • Investors with large sums to invest
  • Investors seeking comprehensive investment service
 
  0.25% - 0.40%  $0 
  • First-time investors with low savings balances
  • Goal-based investors
 


Bottom Line: Should You Use Ally Invest?

When looking for investment help, it’s important to first know your own savings and investment goals as well as your own level of investing know-how. Luckily, Ally Invest offers products for you no matter how experienced you are with investing or not. The self-directed trading and managed portfolios accounts will appeal to hands-on investors and investors who would prefer to be less involved in their investments, respectively. 

Not only does Ally Invest provide products for a range of customers, but it also offers low fees for its services. You also pay less in trading fees than most of its competitors offer. Its annual fee is also far lower than traditional financial advisors. However, the company doesn’t automatically provide real advisors, doing most of its assessment and rebalancing done with technology. This feature can be a positive or negative, depending on what the individual investor is looking for.

Tips on Saving for Retirement

  • As a robo-advisor, Ally Invest can only offer so much in terms of human and personalized advice. It makes for a convenient investing experience, but perhaps you want an in-person advisor who can get to know you and your financial goals. SmartAsset makes finding a financial advisor easier with SmartAdvisor. After you answer a series of questions on your finances, we can pair you with advisors in your area. 
  • To the opposite, perhaps you want to take a more DIY approach to your retirement savings. Using tools like our 401(k) calculator can help you keep track of your savings and better plan for your future.
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