Ally Invest Review 2020 - An Online Discount Broker
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- $0 trading cost
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There was a time when financial markets could only be accessed via telephone and trades were made on calls. Now the investment space has evolved and transitioned from telephone trading to online trades.
These days, all it takes to execute a trade is a click of a button. Traders today have access to a plethora of financial instruments on their laptops or mobile devices.
One such example of a trading platform that has allowed individuals to easily make trades via a laptop or a smartphone device is of Ally Invest.
There is a lot of talk about Ally Invest so I decided to jump on the bandwagon and see what the buzz is all about.
In this Ally Invest review, we will take a look at the trading fees, the types of assets that can be bought via the platform, tools available, customer service of the platform, and more.
What is Ally Invest?
Ally Invest is a broker that allows all kinds of investors to buy and sell a variety of financial instruments including currencies, futures, stocks, ETFs, and mutual funds.
Formerly, the broker was known as TradeKing but eventually, it was purchased by the Ally Financial group, which renamed it Ally Invest. Ally Invest aims to provide all its users with highly competitive fees, seamless trading experience, and top-notch customer service.
Ally Invest platform can be accessed via a desktop computer, laptop device, or a mobile app, allowing users to trade on the go. One of the best things about Ally Invest is that it offers a lower trading fee compared to several other trading platforms.
For instance, the ETFs and stocks can be traded now for $0, while mutual funds cost $9.95 per trade. Moreover, Ally Invest provides a variety of different tools to assist users with investment decisions.
This trading platform is great for anyone who is just getting started with investing, as it’s primarily geared towards individuals with very little experience of financial markets.
Ally Invest Features
Assets Available for Investment in Ally Invest
It is important for individuals to work with a broker that allows them to trade different asset classes. Otherwise, they’ll be limited to trade only a few assets and won’t be able to diversify their portfolio.
Some of the asset classes that are available for investment in Ally Invest include:
- Mutual funds
Types of Accounts
With Ally Invest, users can get two different account types: the Self-Directed Trading account or the Cash-Enhanced Managed Portfolio.
- With Self-Directed Trading, you can trade any stocks and other instruments starting at $4.95 per trade.
- The Cash-Enhanced Managed Portfolio account is more advanced and works like a robo-advisor. It takes care of your trades and balances your portfolio automatically. The minimum investment required for this account is $100.
Whether you have been trading for years now or are just getting started with your journey, it is important to have access to a variety of tools that can facilitate your goals.
For novice investors, educational guides are very helpful while veterans find fundamental analysis tools and technical charts useful.
Ally Invest hosts a very useful educational section, listing several articles to help you along the way. Here you’ll find informative guides on a variety of topics including margin trading, dealing with emotions, market volatility, and inflation.
In the blog section, you’ll also find a dedicated walk-through on some of the financial instruments available on the platform.
This helps you understand how you can use the Ally Invest trading platform to meet your financial goals. If you are unsure about anything, just call the customer support team and they should be able to help you out.
Fundamental analysis allows you to evaluate a specific asset, security or company based on internal as well as external factors. Factors may include interest rates, profit forecasts, financial performance or supply and demand.
Ally Invest provides fundamental research data for investors to make their investment decisions. This includes a number of metrics like market statistics, comparison against key competitors, real-time quotes and dividend dates.
Technical Analysis Tools
Technical analysis is very important, especially for investors making large trades. Ally Invest offers a number of tools that can assist users with technical analysis.
There are technical charts that users can view in eight different formats including bar, mountain, and candlestick. You’ll also have access to a total of 36 drawing tools and 100 chart studies. These tools are supported by a probability calculator and profit and loss graphs.
Since Ally Invest offers some advanced technical tools, it is suitable for veteran traders.
Ally Invest Pricing & Fees
When you’re choosing to work with a new broker, it’s important to understand how much you’ll be paying in fees to execute trades. Brokers with easy-to-understand pricing structures are generally preferred and Ally Invest is one of them.
The trading fee of Ally Invest is very competitive. Since fees vary depending on asset classes, we have discussed the Ally Invest’s fee-system in detail below:
Trading Fee for Stocks and ETFs
Stocks are the most popular asset class on Ally Invest. The Self-Directed trading option charges no fees for stock trades. Charging no fees for trades has become more common with online brokers, and Ally is the latest to join the group.
The same $0 fee applies to ETFs, too. So you can build a heck of a portfolio, well-diversified, and not have to worry about racking up a bunch of fees to get it started.
The Cash-Enhanced Managed Portfolio option also has “no advisory fees, annual charges or rebalancing fees, and 30% of your portfolio is set aside as an interest-earning cash buffer.”
You really can’t go wrong with pricing when it comes to Ally Invest.
Trading Fee for Mutual Funds
For mutual funds, Ally Invest charges a fee of $9.95 per trade. This fee is charged at both buying and selling points. Since I advocate for ETFs and index funds above actively-managed mutual funds, this shouldn’t be a problem for most newer investors.
Trading Fee for Options
The pricing for options trading has also gone down recently. What used to be nearly $5 per option trade is now no commissions on options trades and a fee of just $0.50 per contract. That’s highly-competitive if you know anything about trading options.
Trading Fee for Forex
There are no charges for trading Forex.
Trading Fee for Bonds
Ally Investment charges one dollar for each bond purchase. Bond charges are capped at $250.
Signing Up & Application Process
Getting started with an Ally Invest account is incredibly simple.
Access the Ally Invest Platform and Enter the Required Information
To open an account, you’ll first need to go to the platform and access the registration page. Once there, you’ll need to click on a button that reads ‘Start Trading’.
After that, you will be required to enter some personal information to register. You’ll be asked what type of trading account you wish to open.
You can choose between an IRA account, a joint account, an individual account, and a few others.
Social Security Number Confirmation and Security Question
You will be required to enter and verify your social security number. After that, you’ll be asked to provide your phone number.
This is where you’ll have to create a security question that would come in handy if you forget your password and need to reset it.
Employment Information and Financial Situation
Next, you’ll need to provide your employment details and show where you stand financially.
Finally, your account application is complete. Review the information entered in the application and if all looks good, sign the agreement electronically.
Once your personal information is validated, your account will be opened.
How to Make Payments, Deposit Money and Withdraw Cash
Ally Invest doesn’t require a user to have a specific deposit amount in their account. As such, it is perfect for those who want to reduce their risk by trading small amounts.
The account can be easily funded via a debit card (and it doesn’t have to be with Ally, either). This will credit the balance to your trading account immediately.
You can also choose other payment methods–like a wire transfer–which would take about one to two working days for the funds to be transferred to your account.
Check payments are also accepted, but with them, you’ll have to wait for five to ten business days to see the cash in your account.
You can withdraw the funds out of your account through a bank wire. If you are transferring funds to an account in the U.S., you’ll be charged a fee of $30.
The charges for overseas transfer are $50. You can also withdraw your money through a check. In this case, you’ll be charged $5 per transfer.
One great feature is that if you are currently banking with Ally, all withdrawals will be free.
It’s worth noting that funds from your Ally Invest account can be transferred to another broker. If you are transferring your entire balance, you will have to pay $50.
If you are only transferring one segment of your investment portfolio, you will be required to pay $10 per security.
Ally Invest Security
Ally Invest takes security very seriously. According to their website, “the security and privacy of your personal and account information are important to Ally Invest. Our approach to protect it encompasses technology, processes and procedures.” You can read their full Privacy & Security Policy for more information.
Mobile Support & Accessibility
It is great to have a wide range of financial instruments and access to different asset classes in a single trading platform. However, it’s no good when the platform itself is difficult to use.
You would be glad to know that Ally Invest isn’t one of those trading platforms that take a lot of time to get used to. The overall layout is easy to navigate through.
Inexperienced traders won’t feel intimidated when checking market statistics and other insights for the first time. Moreover, Ally Invest also offers users the option to customize their trading layout.
This is great for traders who give preference to particular metrics or analysis tools. For investors who like to invest on the go, Ally Invest offers a mobile app across iOS, Android, and Windows.
However, I found that the mobile app isn’t very user-friendly and has a few problems that need to be fixed to provide a seamless user experience.
Ally Invest Customer Service
Customer support channels offered by Ally Invest include telephone, email, and live chat. There is also a help section that’s sufficient for most queries related to the brokerage account.
Customer support via live chat is available 24/7 while phone support isn’t that active. Agents are available Monday to Friday only from 8 am to 6 pm.
When it comes to email support, you should get a response to your email within 24 hours. I can personally say that the customer service at the platform is excellent as both live chat and phone support agents are very helpful.
Ally Invest Pros and Cons
- No account minimum required to begin — With the Self-Directed investing option, you don’t have to have a minimum in your account. The Cash-Enhanced Managed Portfolio requires $100.
- Free online stock and ETF trades — This is a huge bonus for people who like to trade ETFs and stocks actively. You won’t have to pay any fees with Ally Invest.
- Range of investment options — As you read above, Ally Invest has an impressive list of investment options for you to choose from.
- Cash-Enhanced Managed Portfolios solution for no advisory charges — This acts like a robo-advisor but doesn’t charge any advisory fees. Now, it’s not as robust as something like Betterment, but you get the idea.
- Thorough FAQ along with and education section — I felt like Ally Invest really wants me to be successful, and their resources are incredibly beneficial (when I’m not on Dough Roller of course :)).
- Around the clock client assistance by phone and live chat — I can personally attest to loving Ally’s customer support. They’re easy to reach and very helpful and friendly.
- Offers total online banking solutions — You have the ability to invest as well as bank through the exact same place. My checking and savings are both with Ally and I absolutely love it. If you’re going to invest with them, it sure makes it easy.
- No fee-free mutual funds — This is where a broker like Vanguard dominates, but Ally Invest doesn’t offer any mutual funds that don’t come with a $9.95 fee.
- Only an online brokerage without physical locations — If for some reason you want to go meet with someone face-to-face, know that Ally Invest is online-only. For most people, this shouldn’t be an issue, but it can add value to others.
- No practice trading and investing system — Some online brokers, like Zacks Trade or E*Trade (more day-trading investment platforms) have practice systems for you to use fake money to practice investing. You can’t do this with Ally Invest.
- Analysis and tools definitely not as extensive as various other online brokerages — Building off the point above, this platform isn’t meant for heavy day-traders, so the research, analysis, and reporting aren’t as robust as you might find with an E*Trade.
Ally Invest Alternatives
Now, TD Ameritrade is offering $0 commissions on stocks, options (add $0.65 per contract), and ETFs. I’ve found their trading platform to be one of the most robust available, and it includes a practice trading area before you use your real money, as well as a ton of advanced research tools.
TD Ameritrade also has over 100 locations across the country and the ability to get a cash management account where you can write checks, use a debit card, get cash from an ATM, and pay bills online.
Like nearly all other online brokers this year, E*Trade has moved to the $0 commission-era. You can get stocks and ETFs for free, as well as options (but their contracts are a little more expensive than Ally’s).
One nice thing about E*Trade is the ability to get no-fee mutual funds (one of the cons of Ally Invest if you recall), and they have a pretty wide array of options, too.
The big difference is the investment platform. E*Trade is designed for heavy investors, and they have hands-down the best platform, research, and trading solutions. While it may not make a huge difference, E*Trade also does have about 30 locations across the country,
Who is Ally Invest for?
Ally Invest is going to be best for people who either:
- Bank with Ally Bank already
- Like simplicity with investing
It’s not a platform designed for heavy day-traders, but it still offers a full suite of options. You’ll be able to do all the investing you want with Ally, minus any advanced stuff like detailed research reports or super-intricate option investing.
While it may seem like TD Ameritrade and E*Trade are better, it’s not necessarily the case. Both of those are more advanced platforms and might be confusing or overwhelming to the novice investor.
Also, while E*Trade does have the option to invest in fee-free mutual funds, their options for free ETFs are a lot less than Ally Invest.
In a nutshell, Ally Invest stands out in terms of pricing, user-friendliness and customer service. It offers a plethora of educational guidelines, fundamental analysis metrics, and technical analysis tools, which make it suitable for all types of traders.
You can use this platform to trade a variety of asset classes including options, mutual funds, ETFs, bonds, and shares and diversify your portfolio.
Ally Invest also offers a mobile app for users who want to trade on the go. Although the app isn’t too user-friendly and has some problems, it is good enough to execute basic trades, read educational guides and view fundamental analysis metrics.
At the end of the day, the decision is up to you. But I’d definitely recommend trying Ally Invest to see if you like it.