How It Works, Pros & Cons
Information about How It Works, Pros & Cons
Ally Invest offers a myriad of investing options, from more active trading to handing your cash off to their robo-advisor. It prides itself on offering low to no fees, commission-free ETFs, and robust trading tools.
With their Robo Portfolios offering (that’s Ally Invest’s robo-advisor product), it’s a great overall company to invest with.
What Is Ally Invest and How Does it Work?
Ally Invest is the brokerage arm of Ally Bank and stands out in its offerings due to its low investing minimum amounts, low fees, and a decent trading platform. This brokerage offers something for most investors, whether you’re looking to DIY your investment strategy or use Ally’s robo-advisor offering.
Most stocks and ETFs have no commission fees, and options trades are $0.50 per contract. When opening an account, you’ll find that even if there is a minimum opening balance, it’s much lower compared to other brokerages — their robo-advisor, for instance, only requires $100 to get started.
More advanced traders will be able to log into their accounts and use tools many other brokerages offer, but you’ll find there are specialized options analysis tools such as dynamic profitability graphs.
Best for Engaged Traders
- No commissions for self-directed trading
- Robo Portfolios have no advisory fees
- Transfer cash between Ally Bank and Ally Invest
Ally Invest offers a DIY option where you select your own securities for your portfolio, including ETFs, mutual funds, Forex, stocks, bonds, and options. Their robo-advisor manages your portfolio based on your investment goals, such as your risk tolerance. The brokerage also offers other features such as commission-free ETFs, and a robust platform for traders.
Ally Invest at a Glance
|Types of Accounts||Individual/Joint Taxable||Four IRAs|
|Research Tools||Variety of calculators||REcognia and Maxit|
|Life Trading Platform||Web-based and mobile||Ally Forex brokerage app|
|Commissions and Fees||No advisory fee||Commissions: $0.50-$9.95|
|Account Minimum||$0: Self-direct trading||$100: Robo Portfolios|
|Securities Offerings||ETFs, mutuals, Forex||Stocks and bonds|
|Robo Portfolios||Diversified mix||Lower risk, high yield|
|Customer Support||24/7 access||Phone, email, live chat|
There are plenty of tools for traders who are looking for more advanced research tools. Ally Invest offers some that are pretty robust, especially for a discount brokerage.
If you’re a technical trader, you can use tools such as a profit and loss calculator, probability calculator, and ones powered by Recognia. There’s also the Maxit Tax Manager, where you can look at what the potential tax implications are if you make a certain trading decision. Plus it helps you create 1099 forms on demand.
Options traders will like the range of tools available, such as an options pricing calculator (compare current bid/ask prices), strategy builder (spots and executes option strategies based on set criteria.
Even if you’re that far yet into your investing journey, Ally Invest has an ETF screener which can make it easier for you to find one that’ll fit your investing goals.
As for real-time life streaming quotes, you can get it for free with the Ally Invest LIVE feature, but Level II advanced quotes from Quotestream are only available to those who conducted more than 10 monthly trades.
Live Trading Platform
Investors can take advantage of Ally Invest’s browser-based live trading platform. Features include broker tools, customizable dashboard, quick tradition capabilities, and real-time streaming quotes. For those who trade at home or on the go can use this platform without needing to download any programs.
Trades can also use Ally Invest’s mobile apps — Ally Forex which is only for Forex trading or Ally Mobile, for all other types of available trades.
Commissions and Fees
Ally Invest doesn’t charge any advisory fees for their Robo Portfolios, and plenty of commission-free ETF, options, and US stocks. Their other fees are competitive, at $0.50 per options contract and $9.95 per transaction for no-load mutual funds. Even though it’s lower compared to competitors, you’ll be charged a $50 fee for a full or partial transfer.
There is a $0 minimum to open an Ally Invest account and a $100 minimum for Ally’s Robo Portfolios.
Ally Invest offers many securities — stocks, bonds, options, ETFs, mutual funds, crypto, forex, and even penny stocks. Meaning, all types of investors will find something that suits their trading goals, whether it’s investing in more passive ETFs, hands-off with a robo-advisor, or more active reading with penny stocks.
Robo Portfolios (formerly called Managed Portfolios) is Ally Invest’s robo-advisor offering. While the portfolio management process is automated, the brokers use human investing experts to create their managed portfolios. Like other robo-advisors, you won’t be able to access a human advisor.
Unlike their self-directed trading where you decide how to allocate your portfolio among various securities offerings, Ally Invest’s Robo Portfolios helps you invest based on goals. As in, they’re specifically designed to be geared towards the reasons you want to invest.
Investors can choose from four types of portfolios:
- Core: This option divides your money across a diversified mix of US, international, and fixed-income assets. Those who have the Core portfolio are probably those who want to be hands-off. Managed Portfolios will tailor your portfolio based on your risk tolerance.
- Income: These portfolios are for those who want to receive higher dividend yield and a lower risk profile at the same time.
- Tax optimized: You’ll be able to be as tax efficient as possible with this portfolio option. Ally Invest invests in low-cost ETFs.
- Social Responsible: Those interested in putting their money towards that do good will be happy to know these types of portfolios focus on companies that are ESG-friendly. In other words, these companies encompass values that promote environmentally friendliness, sustainability, and energy efficiency.
Ally Invest offers some of the best customer service, with 24/7 access via phone, email, and live chat.
Is Ally Invest Right for You?
Ally Invest offers low pricing, a useful trading platform and tools for novice and advanced traders alike. It’s a great fit for those who don’t have a lot of money to invest — $100 for their Robo Portfolios is one of the lowest minimum requirements we’ve seen. More active investors will love the commission-free trades and low options contract fee.
One big downside is you won’t find tax loss harvesting with Ally Invest’s Robo Portfolios, a major downside if you want to ensure your investments are tax-optimized automatically, However, Ally Invest offers a tax optimized option, which invests in asset classes such as municipal bonds and low-cost ETFs which offer tax advantages. So if you’re investing in other types of managed portfolios, you’re out of luck.
Still, Ally Invest has something for almost everyone. Those looking to invest with a robo-advisor will find the brokerage’s no-frills features appealing, and active traders will appreciate the various research tools. However, if you want futures and fractional shares, you won’t find that here.
Pros and Cons of Ally Invest
Ally Invest may be a good fit depending on what features are important to you. These pros and cons should help you decide.
- Low costs and fees
- Forex trading available
- Ability to consolidate between banking and investing accounts
- Can earn interest on cash balances
- Trading tools not available on all platforms
- No crypto or futures trading
- Lack of no-transaction-fee mutual funds
- No tax loss harvesting
Frequently Asked Questions (FAQs) About Ally Invest
We’ve rounded up the answers to several common questions about Ally Invest.
What Research Tools Does Ally Invest Offer?
Ally Invest offers a variety of research tools for different types of investors, among them:
Stock Screener: Allows investors to look at information such as fundamentals, exchanges, price performance, sectors, and valuation.
ETF and mutual fund screener: Sift through criteria such as each fund’s profile, performance, portfolio, Lipper ratings, and risk analysis.
Trading Idea Generator: Use backtesting strategies including quality stock at a reasonable price.
Can I Do Day Trading on Ally Invest?
Although Ally Invest doesn’t explicitly promote or encourage investors to do day trading on their platform, there are plenty of features that will support this type of investing — the company has a wide range of research and technical analysis tools.
When you trade on margin, you’re essentially borrowing money from a brokerage firm to invest in additional securities or other short-term lending needs. The funds you borrow is typically based on the value of securities in your portfolio — you’ll need to pay this back with interest, or the margin rate.
Are There Socially Responsible Investments at Ally Invest?
Portfolios.This offering invests in companies that are proven to engage in sustainability, energy efficiency, and other types of green initiatives.
Contributor Sarah Li-Cain is a personal finance writer based in Jacksonville, Florida, specializing in real estate, insurance, banking, loans and credit. She is the host of the Buzzsprout and Beyond the Dollar podcasts.