With a focus on utilizing technology seamlessly, Ally Invest offers online banking and investing services in a user-centric platform. To around 11 million clients, the company delivers online banking, securities brokerage, investment advisory, mortgage, auto financing, and insurance services.
For investors of diverse expertise, from nascent to seasoned, Ally Invest provides a spectrum of choices such as self-directed and managed accounts. Although recent efforts have targeted millennial and female investors, the plethora of products available remains a strong choice for both novice and frequent traders due to competitive pricing, an intuitive platform, educational materials, efficient tools including screeners, and around-the-clock customer service.
Founded in 2005 and headquartered in Detroit, Ally Invest serves as the trading arm of Ally Bank, offering low-cost, low-entry options for traders and investors alike. A detailed exploration of Ally’s robo-advisor service aims to aid in determining its suitability for your investment necessities.
Advantages and Limitations
Advantages:
- Platforms that are intuitive and user-friendly
- Competitive costs and charges
- Option for financial consolidation
- Opportunity to earn interest on cash balances
Limitations:
- Application limitations on available trading products
- Contingent and other intricate orders unsupported
- Absence of spot cryptocurrency, futures, or forex trading
While Ally Invest’s technological offerings are effective, the somewhat antiquated website could benefit from features such as conditional orders and trailing stops. The platform includes support for four-leg options strategies and offers streaming quotes to provide its traders with the most recent quotes during trade actions. Basic order entry, alongside the lack of chart integration for positions or orders, is evident. Also, there is a lack of order automation or routing control at Ally Invest.
Ally Invest’s main website serves as a gateway to Ally Bank, routinely used to earn interest on cash balances, benefitting from some of the market’s best short-term rates. While options trading differs across platforms, the Ally Invest website is central to accessing all available tools.
Tools allow users to assess the likelihood of market positions within or outside a pre-defined range on certain dates, along with profitability graphics to contrast option prices against profit projections at maturity. Not top-class, these tools offer significant assistance, not typically provided by other online brokerage platforms.
Competitive Trading Costs
Ally Invest presents competitive and attractive trading costs, emphasizing zero-commission dealings for stocks and ETFs, with a flat rate of $0.50 per options contract.
- Stocks and ETFs: Commission-Free
- OTC Stocks (under $2.00): $4.95 + $0.01 per share; maximum 5% and minimum $100 orders
- Options: $0 Commission + $0.50 per contract
- Mutual Funds: Includes both load and no-load funds
- Fixed Income Products: $1 per bond, with $10 minimum and $250 maximum
- CDs: $24.95 per transaction
- Cash-Enhanced Robo-Managed Accounts: Minimum $100, no advisory fee, 30% cash allocation
- Market-Focused Robo-Managed Accounts: Minimum $100, 0.30% annual fee, 2% cash allocation
- Margin Rates By Breakpoint: Variable rates starting at 12% for under $25,000 accounts to 7.50% for $1 million+
- Account Closing: None (besides ACAT Fee)
- Transfer Account Out: $50, with phone-assisted orders at $20 + usual commission
Revenue Generation for and from Clients
While Ally Invest promotes commission-free stock and ETF trading, its revenue often stems from indirect sources. Similar to other brokers in the industry like Ally Invest, they leverage order flow payments. In addition, the absence of fractional shares and portfolio margins is noted. Ally Invest accounts can be connected to an Ally Bank account for accrued interest on cash balances. Here are several ways how Ally Invest profits both from and for its clients:
- Price Improvement: With routing orders only viable through live brokers, Ally customers enjoy an average improvement of $0.0069 per share covering all SEC Rule 605 eligible marketable orders; for options, the enhancement averages at $0.07 per contract.
- Payment for Order Flow: Ally Invest earns from order flow payments, averaging $0.00225 per share for equities while receiving $0.48 per option contract. This positions Ally towards the lower spectrum amidst brokers benefiting from such payments.
- Interest on Cash Balances: Offering enticing interest rates (up to 3.50%) on cash balances moved from the investment account to a linked Ally Bank account.
- Securities Lending: While Ally users can generate revenue through securities lending, selecting specific stocks for lending isn’t facilitated.
With transparency in commissions, fees, and minimal entry requirements, Ally Invest’s competitive edge is highlighted on its website. Navigation towards margin rates from the “Client Services” tab details margin trading comprehensively, alongside an extensive disclosures segment encompassing FINRA content.
Account Varieties Accessible with Ally Invest
Ally Invest caters to a variety of account types commonly utilized by investors:
- Individual and joint taxable accounts
- Custodial accounts
- Traditional and Roth IRAs
- Coverdell Education Savings Accounts (ESAs)
Recently launched, Ally Invest Personal Advice aims at individuals with over $100,000, offering an advisory fee capped at 0.85% of assets under management.
Ally Invest stands out for intuitive and efficient trading platforms, paired with competitively structured commissions, fees, and margins. Both entry-level and seasoned investors can appreciate the screeners and analysis tools available. The platform’s no-commission policy, low account minimums, and high-yield cash accounts make it an attractive, all-in-one financial management solution.
Cash Management Benefits
For seamless cash management, Ally Invest allows clients to move uninvested funds from their investment account to a deposit account at Ally Bank, accruing interest. This facility empowers investors to manually or automatically transfer cash, benefiting from one of the market’s most competitive cash deposit rates at 3.50%. Allied clients can enhance their cash yield with high-interest rates using:
- Recurring Transfers: Automating consistent cash transfers without manual intervention.
- Round-Ups: Rounding transactions to the nearest dollar, with accumulated round-ups over $5 shifted to savings.
- Surprise Savings: Automated analysis of linked checking accounts for “safe-to-save” funds, smoothly transferred to savings.
News and Updates
Upon selecting a security on the Ally Invest platform, basic news headlines and fundamental data become accessible. While this functionality lacks refined filtering or search competencies, it remains sufficient for the majority of investors. Additional insights in this section encompass market overviews, macroeconomic releases, expected earnings, and dividend announcements.
Generating Trading Ideas
Although lacking a dedicated trade ideas generator, Ally Invest introduces investors to a distinctive stock rating feature: the Smart Score. Determining a stock’s investment potential through TipRanks’ Smart Score system, eight data points are evaluated resulting in a 1 to 10 scoring, where 10 signals potential market outperformance. This data is digestible for both beginner and adept investors, enhancing investment decision-making.
Offering objective and thorough online broker evaluations is a priority for our evaluations. Our research, expertise, and investor feedback shaped the process for the 2024 online broker recognitions. Our team conducted a digital survey with 110 questions directed at 26 companies integral to our analysis. Data verification and collection occurred through online research and direct interactions with each company, spanning February 19 to March 19, 2024.
We crafted a proprietary scoring model to evaluate each firm against 11 principal categories and 89 criteria to identify premier online brokers and trading platforms. The collective star rating of each firm emerges from a weighted average of the criteria within these categories.
During the comprehensive 2024 analysis, numerous reviewed firms showcased their platforms through live demonstrations, offering our team direct access for practical testing via video conferencing means.
This comprehensive process ensures an objective and in-depth assessment of top online brokers and trading platforms, bringing you the best insights available.