Ally Invest Bank and Broker Review – Pros and Cons for Traders

About Ally Invest

Ally Invest is the online brokerage arm of banking and financial services company Ally.com. They offer a full suite of financial products including credit cards, banking and loans making it a one-stop shop for integrating your finances. Ally Invest was formed from the acquisition of TradeKing in 2017 and can be accessed through the Ally.com home page under the invest tab or directly through this link.

The site offers a full suite of financial products to enabling integration of your finances. Ally Invest is suitable for both investors just as much as traders who are self-directed. They serve over 250,000 customers with a thriving community of participants.

About Ally Bank

While Ally is just beginning to take a more active role in the world of trading and investing, the parent company, Ally Bank, has been around for nearly a century. Ally was initially founded in 1919 by the General Motors Corporation. The company provides a variety of services including banking, financing, insurance and more. The majority of this review will be focused on Ally Invest from the perspective of traders and active investors.

New Account Promotions

First things first, for those interested in signing up with Ally Invest, they run new account promotions regularly.

Currently, they have an introductory off of 90-days of free trades promotion for new accounts. Free trades apply to both stocks and options. The promotion is capped at $500 worth of trades, so you either get 90-days of free trading or $500 in free trades (whichever comes first).

New accounts can also receive a cash bonus of up to $3,000 based on the size of the initial deposit. Cash bonuses are available for all deposits above $10,000.

The new account promotions are similar to those you will find from similar discount brokers like ETRADE.

Ally Invest Commissions and Fees

Equity Commissions

Ally offers per-trade commissions that start at $4.95 and fall to $3.95 for high balance and high volume traders for U.S. equities. They have a $0.01 surcharge for stocks under $2. They also allow trading for Forex, ETFs, and Fixed Income Securities and accommodate both Traditional and Roth IRAs. Bonds carry a $1.00 fee per bond, with a $10 minimum.

These commissions are now somewhat standard in the world of discount brokers, however, Ally’s $3.95 commission for active traders is actually more competitive than comparable brokers.

Options Commissions

Options trades carry a $4.95 commission and $0.65 per contract. High volume traders (30 trades or more per quarter and over $100,000 balance) have $3.95 commission and $0.50 per contract. Mutual fund trades are $9.95 for no-load and free for load funds.

These prices are relatively competitive when comparing Ally to other discount brokers in the space.

Software Fees

Ally Invest offers a free platform for anyone who opens an account, which is a nice bonus as there are no software fees. The platform is relatively basic and simple enough for newbies to execute trades. Additionally, the mobile app makes it portable and convenient to trade from the road. It’s connected to a Trader Network where traders can share ideas and feedback in a growing community of like-minded self-directed investors and traders. This is such a great benefit as you have the ability to watch others trade and even piggyback trades (not recommended) from the better traders. There are over 400 trader blogs and a standard screen of the 50 most active stocks and options are available.

Account Fees

Margin accounts require a $2,000 minimum balance. There are no activity fees, software fees annual IRA fees. Ally Invest’s Cash-Enhanced Robo Portfolio fee is 0.00%, making Ally one of the few robo-adivsory services that does not charge an advisory fee.

The Cash-Enhanced Robo Portfolios are automated robo-advisors that recommend certain ETF-based portfolios based on your financial goals, risk tolerance and investment time horizon. Broker-assisted trades have a $20 additional fee in addition to the $4.95 commission.

Margin/Leverage

Ally Invest allows the standard 4 to 1 intra-day margin and 2 to 1 overnight margin for accounts over $25,000 (above the PDT rule threshold). The margin rates offered bu Ally are some of the lowest in the industry.

Platform Features and Tools

The Ally Invest platform has a rich number of value added features seamlessly integrated with research and charting tools. Ally Invest offers a robust online platform that will be suitable for most casual investors and/or swing traders.

The company also offers a more advanced platform called TradeKing Live. TradeKing Live offers most of the same basic functions that most trading platforms offer. That said, as most traders know, small differences can have big impacts when it comes to trading platforms.

The TradeKing Live platform is not as advanced as comparable platforms like ETRADE Pro and ThinkOrSwim, however improvements are being made.

There are also quite a bit of tools available in the web-based customer dashboard.

Charts: The platform offers streaming charts with drawing tools and over 90 indicators that traders can use to interpret price action. The charts are clean and easy to use.

Fundamental Tools: Traders can access quick company snapshots and financial metrics to gain a quick read on the ‘story’. Further in-depth research can be made through the trader community network and scanning blogs. This fundamental data can be access on other free sites, but it’s convenient to be able to access it directly from the broker’s website.

Probability Calculator: While these tend to be gimmicky, this one is easy to use and compelling enough to keep using it.

Watch Lists: These are customizable, sortable and more importantly trackable. Additionally, the top 50 most active stocks ensures you don’t run out of ideas throughout the day.

Options Chains: Options chains can be accessed directly from the web dashboard. The chain includes basic price and volatility information for quick options trades.

Research Tools

The High/Low Hit List and Top Ten List embedded scans are some the best research tools for intra-day traders. The TradeKing Live platform is best for technical analysis based trading with little fundamental research (with the exception of the news feed). That said, Ally Invest offers a simple online platform for doing further research on stocks. The online tools are not as robust as comparable platforms however they are much better than free tools like Yahoo Finance.

Customer Service

Ally Invest has customer service ours from 7AM-10PM ET 7 days a week. Customer service can be contacted for trading as well as banking questions. You can get support via phone, email, and live chat.

Ally Invest has acceptable customer support in most cases, however it certainly doesn’t shine when compared to other brokers.

Execution and Routes

Most advanced traders will prefer a direct access broker. Ally Invest doesn’t allow direct order routing to ECNs unfortunately.

Borrows and Locates

The short list is surprisingly extensive and will be suitable for casual investors and swing traders who intend to short stocks.

Ally Investing Cash-Enhanced Robo Portfolios

Ally Invest offers a few competitive trading advantages, however the platform truly shines in the investing area. Ally Invest provides a variety of investment tools and vehicles for every type of investor. For those looking to take a more passive approach to their investing, Ally offers automated cash-enhanced portfolio management without any advisory fees. This is competitive when compared to similar robo-advisors like Wealthfront and Betterment. The nice thing about Ally Invest is that you can manage your stock trading portfolios, bank accounts, and robo portfolios from one dashboard.

The cash-enhanced robo portfolio is, once again, similar to that of other robo-advisors. The portfolio is made up of ETFs from reputable companies like Vanguard and iShares. Investors can choose their risk threshold and Ally Invest will automatically create a portfolio consisting of a handful of ETFs. Lower risk portfolios will hold more bonds whereas higher risk portfolios will hold more stocks.

The Ally Invest platform has tools for benchmarking the performance of the automated portfolios against the S&P 500 and bond index, which is helpful and transparent. We’re still in the process of testing the overall performance of these portfolios in our robo-advisor case study.

For investors who prefer a more “hands-on” approach, Ally Invest offers access to mutual funds, ETFs, and money market funds as well.

Additional Features and Benefits

I can’t say enough about the trader network community. Of course this eco-system was built by Tradeking before they were acquired, but it’s nice to see that the community is still very active, insightful and at the pulse of the action every day.

What Type of Trader is Ally Invest Best For?

Ally Invest is a good platform for beginning and intermediate self-directed traders and investors. While it’s not a fancy feature rich platform, the information and intelligence you can gather through the trader community is one of the core values.

The platform is simple and easy-to-use and the commissions are pretty competitive. This is definitely a step up from other entry-level brokers like Robinhood, however more advanced traders would likely prefer another broker (even in the discount brokerage space).

That said, it can be nice to handle your finances in one space. Ally Bank provides competitive investing and banking options, so traders who are looking to consolidate their financial accounts may enjoy using the Ally platform. Of course, they offer an introductory sign-up bonus so it’s worth a try.

Pros

• Simple straightforward trading platform
• Amazing trading community eco-system
• Great to have baking and brokerage functions integrated cheaply
• Good research tools
• Cheap commissions
• No advisory fees
• No inactivity fees

Cons

• Direct access order routing would be nice.