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Ally Invest is a service offered by Detroit-based bank, Ally Financial, a publicly traded company that has around $180B in assets and over 8,700 employees in the United States.
Although Ally Financial offers a wide range of banking, investment, and other financial solutions for its customers, we will focus solely on Ally Invest — the firm’s investment management unit — in this article.
By the end of 2022, Ally Invest had over 500,000 active accounts registered for its trading platform, offering a dual approach to investment management that includes a self-directed trading solution and managed portfolios designed by a robo-advisor but overseen by investment specialists from the firm.
Bottom Line: Ally Invest offers a wide range of solutions for customers, including trading services, portfolio management, and retirement planning advice. They offer zero-commission stock, options, and ETF trades, as well as, zero-fee robo-advisor services.
|Fees and trading costs|
|Features and tools|
|Ease of use|
What is Ally Invest?
Ally Invest is Ally’s investment management unit, which offers a wide range of solutions for customers, including trading services, portfolio management, and retirement planning advice.
Ally has joined many other brokers in the United States and overseas in the race to offer the most competitive rates for traders, starting with zero-commission stock and ETF trades.
Moreover, Ally Invest also offers a zero-fee managed portfolio solution that functions as a robo-advisory service.
Ally Invest’s competitive edge is primarily its low-fee structure, along with its banking background, which gives the firm a credibility boost in relation to its rivals.
How Does Ally Invest Work?
When it comes to investing, Ally Invest offers its clients a managed portfolio service which is basically a robo-advisor service, or they provide a self-directed trading service for DIY investors.
Ally Invest does not require a minimum deposit to open a self-directed trading account. Meanwhile, to access a margin account to use borrowed funds, Ally requires a minimum account balance of $2,000.
Moreover, customers must deposit at least $100 to access Ally’s automated investing solution called Robo Portfolios. In addition, clients who would like to enroll in the Wealth Management service must have an account balance exceeding $100,000.
Ally Invest offers its clients the possibility of opening one of the following accounts for its managed portfolio solution:
For Ally’s Self-Directed Trading solutions, these are the types of accounts that clients can open:
- Individual, joint, or custodial taxable accounts
- Traditional, Roth, or Rollover IRAs
- Coverdell accounts.
With Ally Invest, customers get access to an ample portfolio of financial products going from traditional options to more sophisticated alternatives like options and penny stocks.
Stocks and exchange-traded funds (ETFs)
Ally Invest offers access to all of the thousands of securities available in the largest exchanges within the United States including the New York Stock Exchange (NYSE) and NASDAQ.
In addition, this provider also offers access to exchange-traded funds (ETFs), which are investment funds whose shares can be easily traded via a traditional stock exchange. For this particular alternative, Ally has made available a handful of commission-free ETFs that can be accessed via its trading platform and used to build portfolios either with the assistance of the robo-advisor or single-handedly.
Options are financial derivatives that give the holder the right, not the obligation, to buy (call option) or sell (put option) a stock at a specific price once the expiration date of the option contract is reached.
Ally offers access to these instruments via its trading platform. They can be used for hedging, speculative purposes, and to engage in sophisticated strategies that produce an income for investors.
The Ally Invest trading platform features powerful analytics tools that allow investors to evaluate multiple options trading strategies, their outcomes, risks, and costs.
The Ally Invest platform provides access to the bond market. With a combined value of over $51 trillion as per the latest statistics, customers can benefit from incorporating these instruments into their portfolio to generate income.
Various types of bonds can be traded via the Ally Invest trading platform including corporate, municipal, federal, and government-backed fixed-income securities. Bonds are typically classified depending on their risk, going from investment-grade issues to the so-called ‘junk bonds’.
Low-priced securities, also known as penny stocks, are trading on the over-the-counter (OTC) market or via the pink sheets. These are informal markets operated by a network of broker-dealers.
As per Ally’s definition, a stock is considered a low-priced security if:
- The value of the stock is under $5.
- The stock is not listed in a traditional stock exchange — i.e. the NYSE or NASDAQ.
- The stock is listed in the “pink sheets” or traded via the OTC market.
The pricing dynamics of this market are different from those of established stock exchanges. This makes penny stocks less liquid and more volatile than regular stocks. Ally offers access to this market but requires an opening order of $100 for customers to engage in trades involving this kind of instrument. The cost of trading these securities is higher as well.
Mutual funds are investment funds run by financial services firms that invest in a wide range of securities depending on their specific objective or investment methodology. Unlike ETFs, the shares of a mutual fund are not listed in a traditional exchange. Instead, the fund handles all of the transactions related to its own shares.
Brokerage firms like Ally Invest facilitate the process of investing in mutual funds by providing access to their shares. However, some of these funds may charge load fees and require a higher minimum deposit compared to ETFs.
Ally offers access to over 17,000 different mutual funds via its proprietary trading platform. The scope and nature of these funds and the cost of buying their shares vary widely from one to the other.
Opening an Account
The process of opening an account with Ally starts after clicking the blue button in the upper right corner of the screen.
For the managed portfolio solution, the button should say “Create Your Plan”; for the Self-Directed Trading solution, the button should say “Start Trading.”
For the managed portfolio option, the process of opening an account will start with asking the client about his/her financial goals. After that, the robo-advisor will build a customized portfolio based on those goals.
Finally, investors will be prompted to make a deposit, with a minimum of $100 required to open the account.
For the Self-Directed Trading service, the process is much shorter because no questionnaire has to be completed.
After choosing the account type, the user will be prompted to disclose his/her Social Security number, personal phone number, and then answer some security questions.
Additionally, employment and financial information need to be provided, and some basic profiling and trading questions need to be answered.
The ID verification process can take up to 3 business days, which is a bit slower than the industry average.
Ally Invest Features
As discussed earlier, Ally Invest caters to active and passive investors alike. So the service offers many features that may fit your specific needs.
|Fees||Stock, options, and ETF trades ($0), mutual funds ($9.95), options contracts ($0.50 per contract)|
|Investment Types||Stocks, ETFs, Mutual Funds, Bonds, Options, and Forex|
|Account Types||Traditional IRA, Roth IRA, SEP IRA, Rollover IRA, Taxable account (Individual and Joint), Trusts and Custodial|
|Platform||Mobile (iOS / Android) and Web-based app|
|Assets Under Management||Over $12 billion|
|Promotion||Up to $3,500 sign up bonus|
|Socially Responsible Investing|
|Support||Email and phone|
Ally Invest Managed Portfolios
Ally Invest’s managed portfolios function as a robo-advisor, which is an algorithm that follows the firm’s investment philosophy to allocate the client’s funds based on his/her financial goals in a wide range of asset classes to construct broadly diversified investment portfolios that should deliver steady returns over the long term.
That said, the portfolios built by the robo-advisor have been pre-approved by human advisors, although the algorithm will take charge of the portfolio once it has been constructed to perform periodic maintenance, including automatic rebalancing.
The firm currently offers four different portfolio choices for customers, depending on their financial goals:
This is a highly diversified investment portfolio that aims to generate wealth over time by taking advantage of the effect of compounding and periodic contributions.
An alternative designed for individuals seeking to live off their holdings or supplement their income through the use of their portfolio. It is mostly focused on generating attractive yields and a steady income stream.
Primarily designed for retirement planning purposes, Ally’s tax-optimized portfolio aims to maximize the returns generated by an individual retirement account (IRA).
The socially responsible portfolio only invests in companies that follow a certain ethical standard or that have a positive impact on the environment or in the social sphere. Eco-friendly and socially conscious investors often find these portfolios appealing.
Investors can sign up for Ally’s managed portfolios by depositing as little as $100, and they can use the firm’s desktop app or mobile app to track the evolution of their investment account over time.
Ally’s managed portfolios offer a cash-enhanced alternative that sets aside 30% of the client’s balance in cash at all times. Those funds generate an annual interest rate of 1% (as of this writing) and this option seeks to reduce the impact of market volatility in the client’s portfolio.
The firm charges a 0.30% advisory fee for its managed portfolios unless the client signs up for the cash-secured alternative (in which case no advisory fees are charged).
Ally Invest Self-Directed Trading
Ally Invest offers a brokerage service known as the Self-Directed Trading solution, which allows the client to take control of his holdings to invest in different types of securities, including stocks, ETFs, options, bonds, mutual funds, and even penny stocks.
There’s a $2,000 minimum required to open a Self-Directed Trading account with Ally Invest. and the firm currently offers zero-commission stock and ETF trades, along with competitive fees for options trading ($0 commission and a $0.5 per contract fee), while bond trading costs start at $1 per bond with a minimum of $10 per trade.
Ally Invest’s web-based trading platform is a proprietary system that includes a charting tool that features 117 different chart studies along with 36 drawing tools that can be applied to all the different instruments offered by Ally.
Additionally, the platform also includes a watchlist, profit/loss graphs for options trading, probability calculators, research tools, an ETF screener, and a mobile trading app supported by both Android and iOS.
A downside of Ally’s Self-Directed Trading is that it does not offer a desktop version, which advanced traders often prefer over web-based platforms.
Ally Invest offers the possibility of trading forex pairs as a separate feature, allowing its clients to trade a selection of 50 different currency pairs.
To open a Forex account, Ally requires a $250 minimum deposit, although the firm recommends a $2,500 minimum to enjoy all the features that the platform has to offer.
For retirement planning, Ally currently offers Individual Retirement Accounts (IRAs) and Roth IRAs for its clients, while 401(k)s are not currently supported or offered by this provider.
The firm does not charge annual or monthly maintenance fees for these accounts and they also offer the possibility of rolling over existing IRAs from other providers.
However, Ally does charge a 0.30% annual advisory fee for the portfolios it manages for IRA account holders unless they sign up for the firm’s cash-enhanced portfolio alternative.
Commission Free Trading
Following an industry-wide trend, Ally Invest now offers zero-commission stock and ETF trading for US-listed instruments, although some commissions and fees may still apply to foreign stocks and ETFs.
Investors can also buy bonds by using Ally’s brokerage services. Bonds start at $1 per bond with a minimum of $10 per order.
No-load mutual funds can also be bought through Ally Invest at a cost of $9.95 per trade, while securities priced at less than $2 generate a flat fee of $4.95 per trade along with an additional commission of $0.01 per share.
No Account Minimums
No account minimum is required to maintain an active account with Ally Invest, but a minimum deposit of $250 is required to open an account. Additionally, a $2,000 minimum is required to be eligible for a margin account.
Market Research & Trading Tools
Ally’s proprietary trading platform features a user-friendly interface that can be accessed through any web browser, although no desktop solution has been launched yet.
The platform includes a decent search function and an advanced charting tool that incorporates more than 100 different technical indicators along with 30+ drawing tools.
On the downside, Ally’s platform does not provide the alternative of setting a two-step security login.
Trade orders supported by Ally’s trading platform include:
- Market order
- Limit order
- Stop-loss order
- Stop limit order
- Trailing stop
- Market on close.
Additionally, these orders can be set as same-day orders or as good until canceled. Ally’s platform also allows users to set price alerts.
Ally Invest’s clients can also trade options by using the firm’s platform, and one of the advantages of trading with this provider is that it does not charge a commission per trade (although they do charge a $0.50 fee per contract).
Ally’s platform has been designed with options traders in mind, as the system features a profit/loss chart, a profitability calculator, and a well-displayed options chain.
These derivatives can be used to generate income via strategies such as covered calls, or they can also be used to speculate on the fluctuation of the price of their underlying securities.
A minimum balance of $2,000 is required to be eligible for a margin account with Ally Invest.
Ally allows for a maximum leverage of 50% per trade, although the actual percentage varies for each individual security.
On the other hand, at the time of writing, Ally charges a minimum of 7.75% per year for margin balances from $0 to $9,999, and a maximum of 3.25% per year for margin balances higher than $1,000,000.
Ally Invest’s proprietary mobile app is supported by both Android and iOS operating systems and it offers most of the features included in the web-based version, although a few things are missing.
The app is user-friendly, the search function is decent, and the interface is very modern. However, the app does not allow the user to set push alerts and notifications (and these features are useful for those who trade by using their phones).
The app does incorporate two additional types of orders (pre-market and post-market orders) both of which are not available in the web-based version.
Ally Invest Trading Platform
The Ally Invest trading platform was conceived primarily with beginner investors in mind judging by the lack of sophisticated trading systems and tools. The platform features a chart analysis module that allows traders to perform over 117 chart studies. They also have 36 different drawing tools at their disposal to analyze the different securities that the platform offers access to.
Moreover, investors can create watchlists and set alerts for multiple securities that they may be interested in. By clicking the ticker symbol of these securities, they will get access to some basic information about the company that issues the instrument, its fundamentals, financial information, and market data such as daily volume, bid-ask spreads, and weekly and annual highs and lows.
Ally also makes available research materials for the securities it provides access to including reports from a handful of security analysis firms. Moreover, a news feed is available and all articles related to a specific stock or company is displayed when customers click on the ticker symbol to learn more about the business.
Other useful tools and features include a stock and ETF screener, an advanced options trading analytics tool, and a mobile app to manage the user’s account and place trades on the go.
Moreover, the Ally Invest app has been rated with 4.7 stars on the Apple App Store after more than 66,000 reviews. The app’s rating on the Google Play Store is, however, much lower as it stands at 3.5 stars at the time this is written based on individual reviews from over 26,000 users. The app has been downloaded more than 1 million times on Android devices.
Ally Invest Pricing & Fees
The prices and fees will vary depending on the type of investment you are looking to make through the service.
Ally Invest does not charge a fee for its robo-advisory service as long as the customer signs up for the cash-secured feature, which is set to maintain 30% of the account balance in cash at all times.
Meanwhile, if customers prefer to stay fully invested, Ally Invest charges a 0.30% advisory fee for its managed portfolios.
A managed portfolio account can be opened with as little as $100.
Ally offers zero-commission stock and ETF trades for US-listed securities, although a commission may apply for foreign instruments.
For options trading, Ally Invest only charges $0.50 per contract, while bonds can be traded for a $1 fee per bond with a minimum of $10 per order.
Finally, mutual funds can be traded at $9.95 per trade, while penny stocks can be traded for $4.95 per order, plus a $0.01 commission per share.
Other fees may apply (including interest charges on margin balances).
Ally Invest’s Individual Retirement Accounts (IRAs) don’t charge annual or monthly maintenance fees, but a $25 fee applies for closing an account, while transfer fees vary from $50 to $75.
Ally does not charge a commission for Forex trades, as they are compensated through the bid/ask spread of each currency pair.
Ally Invest Customer Support
A customer support representative from Ally Invest can be easily reached via phone, e-mail, or physical mail. In addition, for registered users, it is possible to reach out to the company via live chat as well.
For Ally Invest-related matters, both prospective and existing customers can call (855) 880-2559. This channel is available for customers 24 hours a day, 7 days a week.
Moreover, the designated email to send inquiries to Ally Invest is [email protected]. Finally, the firm’s physical mail address is a P.O. Box in Charlotte, North Carolina.
Since customers can reach out to the company through various different channels, the customer support side of the platform appears to be quite robust compared to other brokerage firms.
This is a positive characteristic of Ally that should not be overlooked as being able to solve issues fairly quickly with a brokerage firm, considering that these are matters related to money, is something that most customers will value.
Ally Invest Ease of Use
Ally has created a relatively seamless experience for both registering and using its proprietary trading platform. The fact that no minimum deposit is required to open an account, its zero-commission trading service for stocks and ETFs, and the relatively low deposit required to access its robo-advisor are just some of the characteristics that make this provider a highly user-friendly alternative among brokerage firms.
Moreover, the Ally Invest web-based trading interface and mobile app are both fairly intuitive and they look great from a UI/UX standpoint. Customers can browse through their portfolios, make deposits and withdrawals, check their transaction history, look for securities, and analyze charts with just a few clicks.
The positive ratings received by users on the Apple App Store points to the fact that customers who access the Ally Invest app on an iOS-powered device seem to be having little to no issues with it.
The same can’t be said about Android users as the reviews point to issues like the app not loading in some cases, more limited features compared to the iOS version, and issues with deposits, withdrawals, and account balances.
Ally Invest Security
Ally Invest Securities LLC, Ally Invest Advisors Inc., and Ally Invest Forex LLC are the entities that provide the services offered via the Ally Invest platform. All of these entities are overseen by financial regulators within the United States including the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the National Futures Association (NFA).
All accounts opened with Ally Invest are covered by the insurance policy provided by the Securities Investor Protection Corporation (SIPC), which offers coverage for up to $500,000 held in an account with any member company including up to $250,000 in cash.
The products offered by Ally Invest — stocks, bonds, ETFs, mutual funds, and others — are all financial instruments that carry risk. Investors who expose their money to these financial assets can lose a portion or their entire principal. These losses are not covered by SIPC insurance.
Users can safely use the Ally Invest website to send their personal information as the site has a valid SSL certificate issued by Entrust.
Ally Invest Pros Explained
- Solid security features: Ally Invest is backed by a strong financial institution with a long-standing reputation in the financial industry.
- Regulated by the SEC: The firm is regulated by the Securities and Exchange Commission (SEC) of the United States.
- No advisory fee for the robo-advisor feature: Ally does not charge an advisory fee for its managed portfolios.
- Competitive commission fees: The firm offers competitive rates for trading different securities, including zero-commission stock and ETF trades for selected securities.
- Easy-to-use trading platform: Ally’s proprietary trading platform is easy to use, and the firm has developed a mobile trading app to place trades on-the-go.
- Offers multiple managed portfolio options: The firm offers four different types of portfolios that support four different financial goals (including wealth creation and retirement).
- Offers multiple ways to contact them: Ally’s customer service department can be contacted via phone, email, and live chat.
- Low minimum investment for managed portfolios: The firm only requires a minimum deposit of $100 to open a managed portfolio, and no minimum balance is required to maintain a Self-Directed Trading account.
Ally Invest Cons Explained
- No fractional shares: Ally Invest does not offer fractional shares.
- No cryptocurrency or futures trading: The broker does not offer crypto or futures.
Ally Invest Alternatives
It’s always wise to check out the competition and see what they have to offer in comparison to the features offered by Ally Invest.
|Trading Fees||$0||0.25% per year for the digital service or $4 per month for accounts with less than $20,000||$0|
|Apps||Mobile (iOS and Android)||Mobile (iOS and Android)||Mobile (iOS and Android)|
|Promotions||Up to $3,500 in cash bonus||None||None|
Ally Invest vs. Betterment
Betterment services are fairly similar to those provided by Ally Invest, although Betterment does not offer the possibility of waiving their advisory fees.
If the client chooses not to enroll in the cash-secured feature Ally offers, their advisory fee is 0.05% higher than the 0.25% that Betterment charges.
Moreover, Ally does not offer advanced features such as tax-loss harvesting or smart-beta, although the firm does offer a tax-optimized portfolio (but as a specific portfolio selection rather than as a strategy embedded within the portfolio).
Betterment also offers a more comprehensive set of advisory services for retirement, college, and other areas of financial planning through one-on-one consultations with qualified professionals. (A feature that Ally does not offer.)
That said, Ally has an edge over Betterment as the firm does offer the possibility of conducting self-directed trades within its platform (a feature that Betterment does not offer as of this writing). Check out our full Betterment review to learn more.
Ally Invest vs. M1 Finance
Similar to Ally Invest, M1 Finance does not charge an advisory fee for its managed portfolios, although there are no strings attached for the user to enjoy that pricing.
Instead, Ally requires that its users enroll in their cash-secured feature, which sets aside 30% of the balance in cash at all times, limiting the portfolio’s performance as a result.
On the other hand, M1 Finance offers the possibility of building a customized portfolio with any securities the user chooses to incorporate, which is similar to the Self-Directed Trading solution offered by Ally Invest. Read our full M1 Finance review to learn more.
Who Is Ally Invest Best For?
Ally Invest is possibly the best choice for individuals who are looking to have the best of both worlds: managed portfolios and self-directed trading.
Some investors may prefer to allocate a portion of their net worth on long-term, broadly diversified portfolios, while placing trades on their own with the remaining portion of their capital as a way to take advantage of market opportunities in a way that their managed portfolios can’t.
For those investors, Ally is potentially one of the best alternatives out there.
However, for hands-off investors who have no time — or willingness — to place trades on their own, other robo-advisors such as Betterment or M1 Finance could be a better alternative as they charge a lower advisory fee, while offering more advanced features such as tax-loss harvesting, which is very beneficial in the long run.
Additionally, Ally Invest requires that users set aside 30% of their balance in cash to enjoy their zero advisory fee offering. Doing this could be disadvantageous, as this is a big percentage of the portfolio that will remain uninvested. Therefore, people may find themselves missing out on the returns that the market will provide in exchange for a small 1% annual interest rate.
Ally Invest FAQ
Following are some of the most frequently asked questions with regards to Ally Invest, and our answers.
Is Ally Invest Good for Beginners?
Yes. Ally’s services and trading platform are designed to be very user-friendly and simple to use for investors who are just getting started.
Additionally, the fact that Ally offers zero-commission stock and ETF trades along with zero-fee managed portfolios is also a plus for people who are starting to build their portfolios from scratch.
Is Ally Invest Safe?
Yes. Ally Invest is backed by Ally Financial, a publicly traded bank holding company headquartered in Michigan that is regulated by the Securities and Exchange Commission (SEC) of the United States.
Additionally, Ally Invest is a member of the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 in customer claims including a total of $250,000 in cash claims.
Ally Invest also provides an additional $37.5M in coverage to its accounts, including a maximum of $900,000 in cash claims.
None of these protections cover market downturns.
Ally Invest is the investment management arm of Ally Financial, a well-reputed bank holding company in the United States that offers a wide range of financial products including managed portfolios and self-directed trading solutions for US residents.
The firm’s investment management solutions are very competitive and so is their pricing structure, although their managed portfolios lack certain advanced features offered by their competitors and the retirement solutions are very limited, as 401(k)s and other similar products are currently not supported.
That said, Ally Invest’s services should provide the best of both worlds to investors who want to commit a portion of their net worth to a long-term investment approach, while also taking advantage of occasional opportunities that emerge in the financial markets using the self-directed trading feature that Ally currently offers.
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Alejandro is a financial writer with 7 years of experience in financial management and financial analysis. He writes technical content about economics, finance, investments, and real estate and has also assisted financial businesses in building their digital marketing strategy. His favorite topics are value investing and financial analysis.