Ally Invest Review 2020: Pros, Cons, and All You Need to Know

UTC by Osaemezu Ogwu · 6 min read
Ally Invest Review 2020: Pros, Cons, and All You Need to Know
Photo: Depositphotos

Find everything you wanted to know about Ally Invest – one of the best brokers in terms of low-cost commissions and fees.

Ally Invest is an investment platform, a subsidiary of Ally Financial, an institution founded by Donato Montanaro, Richard J. Hagen Jr, and Thomas A. Desmond. The company’s headquarters is in Fort Lauderdale, Florida, United States, and has been operating since 2005. The platform offers low-cost trading options, mutual funds, ETF trades, and bonds.

Previously known as TradeKing and acquired by Ally Financial in 2016 – the company is relatively new compared to other stockbrokers. However, it offers both self directed investing (where you do all the trading yourself) and managed portfolio (where the platform does all the trading for you). Its low-cost trading and easy to use features make it the ideal investment platform for people who are new to trading options.

Ally Invest Full Review

Ally Invest is one of the most user-friendly online brokers around. They offer a wide range of attractive features and impressive perks like an array of free tools such as stock charts, streaming charts, market, and company snapshot, forex trading options, and the most impressive advantage – low-cost trading options.

Ally Invest offers zero trading costs on all eligible U.S. securities, a zero base commission ($0.05 / contract), $1.00 per bond, and a $0 account minimum to begin trading. They also offer free commissions on all eligible U.S. ETFs, a $9.95 mutual fund trade, and data on their various options like stock, ETFs, options, bonds, and so on.

Ally invest also boasts of reliable customer support, seven days a week. What’s more, the application process only takes less than 10 minutes to complete. These options are likely to interest and attract beginner investors and seasoned traders alike.

Accounts in Ally invest are protected by SIPC for funds up to $500,000 with FDIC insurance covered up to $250,000, although futures account and Forex are not covered.

When an investor trades through the automated managed portfolio, the investor has the liberty to choose a cash-enhanced portfolio that would set aside one-third of the portfolio in the cash buffer; this comes as a refreshing option to investors who are disinclined or reluctant to take risks. Meaning that in the unfortunate event that the other trades invested fall, the investor will have a 30% buffer.

Ally Invest is the ideal stock broker for self-directed traders since the zero-fee policy enables the trader to keep all profits, instead of paying costly fees. The platform also presents its many users with tools to access their accounts on the go – with mobile apps for both IOS and Android smartphone users. These apps are easy to use too. Several in-app functions would help answer questions that the investor might have instead of referring them to the FAQ page. Advanced traders may not find Ally invest suitable because they don’t possess as many tools or professional advisors as other advanced brokers.

Platform’s Pros & Cons

Pros

  • Investments in the managed portfolios have a low minimum investment requirement of just $100 to start;
  • Zero fees on all trading options;
  • The platform is easy to use and best for traders who are just starting;
  • The minimum amount as the account balance is $0;
  • The web-based platforms are a plus for traders who operate from work and home because it does not require any downloads. It also has applications for mobile devices, which will make trading a convenient exercise for traders.
  • Investment and research tools are available – a strategy scanner that identifies and works on options strategies and options pricing calculators to compare current prices.
  • Access to some of the best interest rates available on several loans and leasing arrangements on the market in the form of Ally Bank;
  • Reliable and efficient customer service, which is available seven days a week.
  • Opening an account is easy and fast.

Cons

  • The mutual funds are not free – it has a transaction fee of $9.95, which might make investors might feel they will be better off investing other heavily discounted online brokers who don’t usually charge transaction fees on mutual funds.
  • Very advanced investors might find the platform lacking in some features than other sophisticated online brokers;
  • Funds transfers are relatively slow – it may take up to five working days to transfer funds into your account by ACH and twice as long when using a check;
  • There are no local branches, as everything is done online; this might put off potential investors that prefer to do business face to face in most cases.

Best Things About Ally Invest

Some of the best things about the online stockbroker are;

  • It is by far the cheapest discount online brokerage.
  • The customer service is excellent, and they operate effectively.
  • The applications and web platforms are user friendly.
  • The platform has many research and data tools to facilitate and enable traders to have information on trading strategies and data.
  • The traders are guaranteed an array of features and a clean user experience when in use
  • The brokerage does not charge fees or commissions for trading; they operate a minimum account balance of $0 to begin trading.
  • The brokerage is SIPC and FDIC insured for up to $250,000.
  • All the bank and brokerage accounts are managed under a single login.

Things to Improve

  • There should be bank branches to encourage investors who prefer the face to face kind of business.
  • The features should be improved upon to invite advanced investors.
  • The transactional fee for the mutual funds should at least be reduced significantly to appeal to investors.
  • The penny stock options should be revised as the platform is not ideal for penny stock trading because the charges are a bit on the upside (for stock under $2 per share, $4.95 is charged).
  • Ally investors should have more professional advisors like other brokers like Charles Schwab and Fidelity.
  • Options should be encouraged more on the platform.
  • Time taken to confirm transactions is way too long (5 business days using ACH and ten business days paying with a check). This might put off potential investors who are used to the fast funding of accounts experienced in other online brokers like Fidelity and Vanguard.

Conclusion

Ally Invest is an easy-to-use brokerage platform for all investors, especially beginning investors; the platform provides features and tools that will aid the trader in making the right choices and adding, extensively to the trader’s knowledge.

The low-cost requirements is also an added advantage as it encourages and appeals to investors; they also offer a 30% buffer for severely risk-averse investors which is a plus. The zero-fee policy for self-directed traders is commendable, as is the ease of use and operation of both the web platform and the online broker’s application.

However, steps should be taken to ensure that local branches are put in place and those transactional fees for mutual funds are significantly reduced or scraped. Overall it is easy for new traders to trade conveniently and at a low cost; it requires little to no cost to begin on Ally Invest, and the integration with Ally bank is an added advantage as well as its commission-free trades. Ultimately, the experience in trading with Ally Invest is pleasurable, and new investors can be sure to enjoy the experience.

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