Ally Invest: The Future Of Hands-Free Investing?

Ally Invest is a top brokerage offering that is particularly well-suited to existing Ally customers. It offers commission-free stock and ETF trades, and one of the lowest costs for trading options. Ally also stands out for its broad range of investment options and strategies, including self-directed investing with commission-free trading of stocks, ETFs and other asset classes, as well as managed options. The platform is also well-regarded for its 24/7 customer support and strong web-based platform.

Self-directed trading

Ally Invest's Self-Directed Trading option is tailored for hands-on investors who want to manage their own portfolio. It offers $0 commission fees on U.S.-listed stocks, ETFs, or options, plus no account minimums to get started. This means you can start trading stocks and ETFs for $0 commissions with no account minimums, and other fees may apply.

Ally Invest provides a wide variety of investment choices built with the do-it-yourself investor in mind. It offers in-depth research and market analysis tools to support all types of investment strategies.

Ally Invest's dynamic streaming trading experience allows you to manage your account, access your portfolio, and make trades seamlessly across multiple devices – on a desktop or with mobile and tablet apps for iPhone and Android.

Ally Invest also offers instant money movement, allowing you to transfer money between your Ally savings and brokerage accounts in minutes. This feature lets investors take advantage of higher interest rates compared to the typical default sweep interest rates of most brokerages.

Additionally, with a Self-Directed brokerage cash account, there is no minimum deposit required. However, Self-Directed brokerage margin accounts require a $2,000 minimum deposit.

Ally Invest is a member of the Securities Investor Protection Corporation (SIPC), which covers customer claims up to $500,000, with a maximum of $250,000 for cash claims. While SIPC protection safeguards your funds if Ally Invest fails, it does not protect against investment losses from market fluctuations.

Ally Invest also provides additional coverage of up to $37.5 million, including up to $900,000 in cash, with an aggregate cap of $150 million.

Robo portfolios

Robo-advisors, also known as automated investing services, are digital platforms that provide automated, algorithm-driven financial planning and investment services with little to no human supervision. They are called robo-advisors due to the automated features at the core of this type of investing platform.

Robo-advisors are a good option for those who want a relatively hands-off way to invest. They are also a good entry point for those with small accounts and limited investment experience. They are typically inexpensive and require low opening balances, making them available to retail investors.

Robo-advisors use an online survey to gather information about your financial situation and future goals. They then use this data to offer advice and automatically invest for you. They often use passive indexing strategies, based on modern portfolio theory, to optimise investors' risk-return trade-offs and automatically manage and rebalance their portfolios.

Robo-advisors generally offer a range of portfolio choices, from conservative to aggressive, and recommend a portfolio based on your risk tolerance and goals. They also provide regular rebalancing of your portfolio, financial planning tools, and tax strategies.

Robo-advisors are regulated by the Securities and Exchange Commission and are subject to the same securities laws and regulations as traditional broker-dealers. They typically insure their accounts via the Securities Investor Protection Corporation (SIPC).

Ally Invest offers robo-portfolios for those who want a hands-off investing approach. You can get started with just $100, and there are no advisory fees, rebalancing fees, or annual charges. 30% of your portfolio is set aside as an interest-earning cash buffer, and the rest is invested in a mix of low-cost, diversified exchange-traded funds (ETFs).

Personal advice

If you're looking for personal advice on investing, Ally Invest offers a dedicated advisor and exclusive support from their advisory team. This service is for those with a minimum of $100,000 in assets under care.

Here's how it works:

Initial Consultation and Financial Planning

You'll first meet with your dedicated financial advisor for an initial consultation. This will be followed by several financial planning meetings to understand your goals and create a financial plan.

Portfolio Management

Based on your goals, a financial plan, including a portfolio, will be designed to help you meet your objectives. Your advisor will ensure your plan stays on track and meets your risk tolerance and time frame.

Regular Meetings and On-Demand Advice

You'll meet with your financial advisor at least quarterly, but you can contact them at any time. Meetings with your advisor are remote, and you can access your dedicated support team during standard working hours.

Blended Annual Portfolio Advisory Fee

The annual fee for this service is based on a blended rate of your total assets under management. For the first $250,000, the fee is 0.85%. For the next $750,000 up to $1 million, it's 0.80%, and for assets above $1 million, the fee is 0.75%.

Benefits of Ally Invest Personal Advice

• Dedicated Advisor: You'll have a single point of contact in your dedicated investment advisor, who will provide ongoing support and guidance.
• Comprehensive Financial Planning: The service covers all your assets, even those not managed by Ally, to provide a holistic view of your finances.
• Lower Fees: The advisory fees are lower than those charged by traditional human investment advisors, who typically charge around 1% of assets under management.
• Lower Minimum Requirements: While traditional investment advisors often require minimum assets of $500,000, Ally's personal advice service has a lower threshold of $100,000.

Other Things to Consider

Ally Invest's personal advice service may not be suitable if you're looking for advice on investing in fractional shares, futures, or cryptocurrency. These are not offered by Ally Invest.

Additionally, while they offer traditional and Roth IRAs, they do not provide SEP or SIMPLE IRAs, which are retirement plans for the self-employed.

If you're considering Ally Invest for personal advice, be sure to review their terms and conditions and ensure their services align with your investment goals and preferences.

Commission-free trading

Ally Invest offers commission-free trading on eligible U.S.-listed stocks, ETFs, and options, with no account minimums to get started. This means you can start trading with $0 in your account and pay no commission fees on certain trades. This is a significant advantage for those who are new to investing or who prefer a hands-on approach.

There is a wide variety of investment choices with Ally Invest, catering to both new and experienced investors. The platform provides in-depth research and market analysis tools to support all types of investment strategies. Additionally, investors can access advanced charting tools and calculators to make informed decisions.

For U.S.-listed stocks and ETFs priced at $2 or higher, there are no commission fees. However, for stocks and ETFs priced under $2, there is a $4.95 base commission plus $0.01 per share. This is considered a low-priced security, and the maximum commission charge doesn't exceed 5% of the trade value.

Ally Invest also offers a range of commission-free ETFs from market leaders such as Vanguard, GlobalX, and iShares. These ETFs are designed to complement your portfolio and provide a diverse strategy with minimal impact on your bottom line.

Options trades have no base commission and a competitive per-contract fee of $0.50, which is lower than some other brokers. This makes Ally Invest attractive to options traders.

In February 2023, Ally Invest eliminated its $9.95 fee for mutual fund trades, allowing investors to choose from about 5,500 no-transaction-fee mutual funds.

With its competitive pricing, helpful trading tools, and an easy-to-use platform, Ally Invest is a strong option for traders looking for commission-free trading opportunities.

Investment options and strategies

Ally Invest offers a range of investment options and strategies to cater to investors of all levels, from beginners to experienced traders. Here are some of the key investment choices available:

• Self-Directed Trading: This option is suitable for hands-on investors who want to manage their own portfolios. It offers commission-free trading on U.S.-listed stocks, ETFs, and options, with no account minimums required. Self-directed investors can access a wide variety of investment choices, in-depth research tools, and market analysis tools to support their investment strategies.
• Robo Portfolios: This option is ideal for busy investors who prefer a hands-off approach. Ally Invest offers automated investment management through its Robo Portfolios, which are managed by smart robo-advisor technology. There are four portfolio choices: core, income, socially responsible, and tax-optimized. Investors can start with a minimum investment of just $100. The Robo Portfolios offer two plans: the cash-enhanced plan, which holds 30% of the portfolio in cash with no fees, and the market-focused plan, which holds 2% in cash and charges a 0.30% annual advisory fee.
• Personal Advice: This option is suitable for investors with larger portfolios who prefer hands-on professional investment management. With a minimum investment of $100,000, investors are assigned a dedicated investment advisor who provides personalized financial planning and investment management services. The annual advisory fee for this service is based on a tiered schedule, ranging from 0.85% to 0.75% of assets under management.

In terms of specific investment products, Ally Invest offers stocks, mutual funds, ETFs, options, futures contracts, and fixed-income securities. Fixed-income investments include U.S. Treasuries, government or corporate bonds, certificates of deposit (CDs), and other securities.

One of the standout features of Ally Invest is its broad range of investment options, making it a versatile choice for investors. Additionally, with no account minimums for self-directed trading and low minimums for Robo Portfolios, Ally Invest is accessible to investors with varying financial capabilities.

However, it is important to note that Ally Invest does not offer trading in fractional shares or include cryptocurrency in its product menu, which may be limitations for some investors.

Frequently asked questions