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Ally vs. Schwab

SmartAsset: Ally vs. Schwab

On the surface, Ally and Schwab are very similar. The full-service brokerage firms each offer the ability to build an investment portfolio with the help of robo-advisors or financial planners and both offer banking tools as well. But the investment fee structures set these two competing brokerage firms apart. If you are looking for personalized advice on building your investment portfolio, consider working with a financial advisor. They can help you manage your entire portfolio and offer guidance to help you achieve your money goals. 

Overview of Ally vs. Schwab

Ally Invest is the trading and investment service of Ally Financial. The company was founded in 1919 by General Motors (GM) as General Motors Acceptance Corporation (GMAC). Its purpose at the time was to provide financing for GM vehicles. The company later entered other financial service sectors, such as insurance and mortgages. It re-branded as Ally Bank in 2009 (later, Ally Financial). In 2016, Ally acquired TradeKing, which was re-branded as Ally Invest.

Schwab, also known as Charles Schwab, unites a range of financial services under one roof. It has no trade or account minimums for its investment funds. Plus, Schwab clients can invest in actively and passively managed funds. In addition, investors can use a hi-tech robo-advisor tool to automate their investments.

Schwab recently acquired TD Ameritrade, enhancing its services for clients wanting to trade international currencies. By 2023, it will fully assimilate TD Ameritrade’s functions into its platform. Schwab currently manages about $8 trillion in customer assets.

Ally vs. Schwab: Trading Fees

The trading fees involved with a brokerage platform are one of the top considerations when selecting one. If you don’t pay attention to the fees upfront, you could get stuck with a fee structure that doesn’t work for your investment style.

Ally Fees

Most notably, Ally’s robo-advisor, called the Robo Portfolios, doesn’t have a fee involved. When you work with the Robo Portfolios, you won’t find a fee attached. The robo-advisor takes your money goals and financial situation into account as it builds an investment portfolio for you. As your goals change, the robo-advisor will make adjustments for you.

In terms of self-directed trading, you can make commission-free trades for U.S.-based stocks and options. You’ll pay $0.50 per online options contract and some mutual fund trades come with a $9.95 trading fee. If you opt for the Wealth Management services, you’ll need at least $100,000 to get started. And the advisory fee will range from 75% to 0.85%.

Schwab Fees

The Schwab robo-advisors offering, Schwab Intelligent Portfolios, is available for free. But you’ll have the option to tap into a Premium service for a monthly fee of $30, which includes unlimited guidance from a Certified Financial Planner (CFP). The Premium option also requires a $300 one-time planning fee.

When making trades on your own, trades on listed stocks and ETFs are free. But U.S. over-the-counter equities require $6.95 per trade. If trading options, you’ll pay $0.65 per contract. Broker-assisted trades tack on an extra $25. Wealth Advisory services are available to those with at least $1 million to invest, with fees starting at 0.80%.

Ally vs. Schwab: Services and Features

SmartAsset: Ally vs. Schwab

Both Ally and Schwab offer 24/7 support. Plus, you’ll have the option to work with an advisor through either platform. When choosing between Ally and Schwab, here are the services and features that you’ll likely want to consider first.

Ally Services and Features

In terms of robo-advisor options, you can get started with Ally if you have $100. The full-service platform offers the ability to build your portfolio from a desktop or mobile device. This makes it extremely easy to adjust your investment strategy at any time.

When choosing self-directed trading, available account types include individual, joint, custodial, Traditional IRA, Roth IRA, Rollover IRA and Coverdell. Wealth Management clients can also open a beneficiary Roth IRA or beneficiary IRA. If opting for the Robo Portfolios, available account types include individual, joint, Traditional IRA, Roth IRA and Rollover IRA.

Schwab Services and Features

If you want to work with Schwab’s robo-advisor, there’s no minimum account balance holding you back. Like Ally, Schwab offers a mobile and desktop version of the investment platform. But unlike Ally, Schwab clients can ask questions at a physical branch.

With Schwab, you can open a Roth IRA, Traditional IRA, Rollover IRA, Inherited IRA, Custodial IRA, Personal Choice Retirement Account, 529, Education Savings Account, Custodial Account, Individual 401(k), SEP-IRA, SIMPLE IRA, Personal Defined Benefit Plan, Business 401(k) Plan and Company Retirement Account.

Ally vs. Schwab: Online and Mobile Experience

Ally and Schwab each offer highly rated mobile experiences. Each scored higher marks among Apple users. For Apple users, Schwab came out on top with a 4.8 out of 5-star rating. Ally has a 4.7 out of 5 stars. The tables turned for Andriod users. Ally came out slightly ahead with a 3.9 out of 5-star rating, while Schwab earned 3.8 out of 5 stars in the Google Play Store.

Which Investment Firm Should You Choose?

With a more robust selection of account types, Schwab may be a better fit for investors seeking the benefits of a particular account. For example,  if you are looking to open a more specialized account, like a self-employed retirement account, then Schwab likely offers what you need. Ally Invest offers an easy starting point with investment minimums as low as $100. Low fees, a robust robo-advisor option, and 24/7 support may draw you in but ultimately the right option is the one that works best with your unique situation.

Bottom Line

SmartAsset: Ally vs. Schwab

Both Ally and Schwab offer top-notch investment tools. Schwab offers more account types, but the straightforward robo-advisor features make Ally worth a look as well. Ultimately, the right choice varies based on your specific needs as you build an investment portfolio. Those wanting to automate their asset allocation can consider working with a financial advisor instead.

Tips for Investing

  • Building an investment portfolio through a brokerage platform is possible. But sometimes, you need help from a professional to create the most appropriate portfolio for your goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • As you build out an investment portfolio, take advantage of SmartAsset’s free resources. For example, you can visualize your portfolio’s potential growth with our investment calculator.

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