Ally Invest is part of a diversified financial services company that includes banking, lending, and an options-centric brokerage formerly known as TradeKing. Ally Invest has made large strides towards becoming a better broker for newer investors, but this comes at the detriment to the options-focused customer base it inherited in the TradeKing acquisition. We’ll look at how Ally Invest has continued to evolve to serve a larger base of retail investors and help you decide if it is the right fit for your portfolio. Aside from this Ally Invest broker review, we've also reviewed the Ally Managed Portfolios robo-advisor service.
- Ally Invest is adding tools to help new investors begin their journey, but that’s at the expense of development time for the legacy TradeKing customers who were options-centric.
- Ally Invest's ETF-focused investors can take advantage of the well-designed screeners, which include the capability to filter results to include—or exclude—a particular stock.
- There are two web-based platforms available through Ally Invest. The basic one is linked to the banking features while the Ally Live platform has streaming real-time data and some customizable charting capabilities.
Who Ally Invest Is For
As with many online brokerages that are part of a larger financial offering, Ally Invest is best suited for the Ally Bank client who wants to get into holding stocks and ETFs. The more integrated you are with the banking platform, the more benefits you will enjoy on the investment side. Beyond this fact, Ally Invest is joining the hunt for retail investors. There are still a lot of legacy functions that serve the active trading crowd, but the new development projects are mainly focused on appealing to and onboarding investors with simpler requirements.
Tightly integrated with banking capabilities
The InvestLIVE platform is customizable and has streaming real-time quotes
Ally Invest native mobile apps and mobile browser pages offer quick bank transfers and auto-updating quotes
Many of the legacy TradeKing options analytics are gone, or very effectively hidden
The basic web platform is outdated and clumsy and the mobile apps are missing some analytical tools
You cannot trade futures, futures options, or any international assets
- As the Ally Invest platform develops, you'll find new tools to enable seamless transfers of capital between accounts. Investors can move cash in and out, and even pay personal loans with proceeds from the brokerage accounts.
- The InvestLIVE platform, which is launched from the website after logging in, has a customizable layout that the client can adapt by dragging and dropping features to their desired locations. Clients can also change the color scheme, set a default symbol to display when the platform is opened, and customize the order of columns shown.
- The Ally Invest mobile apps make it simple to move cash between accounts, and have data that updates every few seconds. It’s not exactly streaming, but it's not static either—unlike the standard website.
- The legacy TradeKing platform had several innovative tools to help a customer screen for a possible options trade. We could not find any of them during our extensive testing. Only the analytics for a trade that the client is setting up are still in the platform. Other options-specific research choices on the standard website spawn a new tab on your browser, and are not connected to the trading platform.
- The standard web platform does not have updating quotes. You have to manually refresh the screen to get updates. Mobile apps are missing screeners and most of the options functionality.
- The asset classes available on Ally Invest are limited to equities, options, mutual funds, and fixed income. The latter cannot be traded on mobile devices.
Overall, Ally Invest is relatively user friendly, but it is even more so if you are coming in from the banking arm. If you're already an Ally Bank customer, opening an Ally Invest account is simple and fast. Once you have opened the account, you choose your default layout for the account snapshot, and transfer in some cash once you’re ready to trade.
The InvestLIVE platform is easy to use although certain research capabilities are difficult to find or unavailable, such as the legacy TradeKing options analytics. We do not recommend using the "classic" trading platform, though. It's clunky and gave us an early 21st-century flashback. On the Live platform, clicking the "QuickTrade" button opens up a simple trade ticket that you can use for stocks/ETFs or options.
There are some customization options on InvestLIVE, such as colors and the layout of your dashboard. You can set your preferences for any display that has columns, such as a watchlist, and re-order the columns according to what you feel is most important. The workflow on InvestLIVE is easier than on the standard website since the menu choices have been collapsed to a single level.
The native mobile apps have a workflow that is simple and straightforward, though most research capabilities are not available. You can only trade equities, options and mutual funds on the mobile app; all fixed income trades must be done on the website or InvestLIVE. Conditional orders are not enabled on the mobile apps. Watchlists are not a key component of the mobile apps.
Trading on Ally Invest feels like a step backward if you came to it from TradeKing. There are few customization options for setting trade defaults—just market or limit order. You can close an equity position from your portfolio listing easily. We were unable to test the ability to roll an options position, however, though that was elegantly implemented in the legacy TradeKing platform. On InvestLIVE, trading data updates periodically but isn’t streaming. You can enter multiple orders at once on the standard website.
Ally Invest’s mobile trading workflow is simple and straightforward, but limited. We encountered some annoying confirmation screens that could not be turned off. The inability to trade all the available assets on the mobile platform was also a negative factor in our review.
Range of Offerings
You can trade U.S. equities and options, as well as mutual funds, on all Ally Invest platforms. Fixed income products can be traded on the regular website. There is a separate platform for trading forex products but it is not integrated with the other Ally Invest products. Customers of Ally Invest can invest in the following:
- Stocks long and short (over 4,000 on the easy-to-borrow list for short sales)
- OTCBB (penny stocks) with the following restrictions: Minimum opening purchase of $100 required. Stocks priced less than $2 are charged a base commission up to $4.95 plus 1 cent per share on the entire order.
- Mutual funds (0 no transaction fee)
- Bonds (Corporate, Municipal, Treasury, CD)
- Simple and multi-leg options
- Robo-advisory integrated into website/mobile app
- Forex (52 pairs on a separate platform, Ally Invest Forex)
Ally Invest clients can use the basic order types such as top limit, trailing stop, and trailing stop limit. Some conditional orders (one triggers another, one cancels another) are available. You can choose a tax lot for a position you’re closing after the trade has settled if you want to override your account-wide selection of first in, first out (FIFO) or last in, first out (LIFO).
Ally Invest does not maintain a proprietary order router. The firm says that all orders are processed immediately and execution partners are measured on a variety of factors including speed and opportunities for price improvement. On average, Ally Invest clients receive price improvement of $0.0053 per share. There is no automation of a trading strategy.
Ally Invest's fees are in line with most industry participants, with the company having joined in the race to zero fees that began in Oct. 2019.
- No commission to trade equities or ETFs
- For OTCBB/penny stocks: Ally Invest requires a minimum opening purchase order of $100.00 per and adds 1 cent per share on the entire order for stocks prices less than $2.00. Maximum commission per order not to exceed 5% of the trade value, with a minimum of $4.95 +$.01 per share.
- There is no per-leg commission on options trades. Per-contract commissions are $0.50.
- No charge to open or close options contracts of $0.05 or less.
- An order for 50 options contracts is $25.00.
- Covered call trade of 500 shares plus 5 contracts would cost $2.50.
- Mutual fund commission is $9.95.
- Forex trades do not incur a commission, but Ally Invest Forex takes the spread.
- Margin interest ranges from 7.75% for $10,000 balance to 5.5% for over $100,000 as of January 2020. Rates were cut significantly in April 2020. This is slightly lower than average.
- No fees for inactivity or receiving wires.
- Sending a wire is $30.
- Sending a check is $5.
- Paper confirmations and statements are available on request for $2 each.
- There is a $50 fee for partially or fully transferring an account out.
- There is no account closure fee.
- Live broker fee is nominally $20 per trade, but Ally Invest says they rarely charge this fee.
- Ally Invest does not pass clearing fees onto their customers. These are typically a fraction of a penny per share.
How This Broker Makes Money From You and for You
The pressure of zero fees has changed the business model for most online brokers. In lieu of commissions, the way brokers make money from you is less obvious - as are some of the subtle ways they make money for you.
- Interest on cash balances: Ally Invest clients are not automatically enrolled in cash sweep programs that pay a higher interest rate. Clients are encouraged to open an Ally Bank account and move uninvested cash to an interest-earning account, but the brokerage itself does not pay any interest on cash. Ally makes money from the difference between what you are paid on your idle cash and what they can earn on customer cash balances.
- Stock program: Ally Invest earns revenue loaning stocks in your account for short sales but does not share that revenue with you. The revenue is shared with its clearing firm, Apex Clearing.
- Payment for order flow: Ally accepts payment for order flow (PFOF) on some orders. This is the practice where a broker accepts payment from a market maker for letting that market maker execute the order.
- Price Improvement: On average, Ally Invest clients receive price improvement of $0.0053 per share on equity trades, and $1.39 per contract for options trades.
- Portfolio Margining: Ally clients cannot apply for portfolio margining, which can lower the amount of margin needed based on the overall risk calculated.
- Ally clients cannot apply for portfolio margining
- Ally Invest does not have a stock loan program
- Ally pays no interest on idle balances
- Clients can open a savings account with Ally Bank and manually move idle cash to earn additional interest
- Dividend reinvestment is set at the account level for all dividend-paying stocks
Quotes, charts, company news, earnings, and fundamentals are all available under the Research section of both of Ally Invest’s web-based platforms. Most of the options capabilities can only be found on the standard website. Ally Invest does not offer a trading idea generator beyond the screeners.
There are two stock screeners available through Ally Invest. The first is a screener that offers approximately 80 fundamental and technical criteria from which to choose with six predefined screens. You can edit the criteria and save the screen for future use. The second is a technical screener powered by Recognia.
Ally Invest’s new ETF-specific screener was rolled out in December 2019 that includes the ability to create a customized screen. There are several predefined screens set up by Lipper. You can filter ETFs by keyword or by a specific stock symbol. There’s a menu of choices that operate on the results of a screen - add the symbols to a watchlist, do more research, or open a trade ticket. Clicking on a particular symbol opens a detailed research page for that ETF.
Mutual Fund Screener
A basic mutual fund screener can be found on the Ally Invest website with approximately 35 criteria to filter funds. Here again, you can save a screen for later reuse.
There are some legacy TradeKing options strategy developers on the standard website that are not available on InvestLIVE. They’re difficult to locate and most of them spawn an additional browser tab that is not integrated with the rest of the platform. There are no options scanning tools on the mobile apps.
Fixed Income Screener
On the standard website, you can scan for bonds by clicking on Trading and then Fixed Income. Select a bond type by clicking on one of the buttons (Muni, Agency, Strips/Zeros, Treasury, Corporate, CDs). Each bond type has a query definition page where you define the search, a query result page that lists the bonds that match your query definition, and a bond detail page where you can get more information about a bond on the list. This is a fairly basic screener with few criteria from which to choose.
Tools and Calculators
There are a few calculators on the Ally Invest website. For options traders, there is a Probability Calculator and a Profit/Loss Calculator. For fixed income, there is a Bond Yield Calculator. There is also a list of top movers for options.
There is a static news feed supplied by MT Newswire and blog headlines are from Seeking Alpha. Clients can sign up for an emailed Breakfast Bell market report that is sent out each morning prior to the market open which contains major news stories, economic and earnings news along with a list of bullish and bearish stock ideas. Customers can also receive a daily report of biggest gainers/losers and stocks with the largest volume.
There are a few tools available, some of which are integrated into Ally Invest and others that are not. For options analysis, there are some reports from iVolatility. Recognia technical scanners are available on the InvestLIVE platform. There are also some CFRA and Morningstar reports available for ETF research.
ChartIQ supplies streaming charting capability on the InvestLIVE platform. Charting on mobile apps is powered by Markit.
Ally clients are able to view their account holdings across their self-directed, managed portfolio, checking and savings accounts on a dashboard, which shows all of their Ally-located financial relationships. Unrealized gains and losses can be viewed in real time, but realized gains and losses are not available until the following day. Buying power and margin balances are displayed in real time. You can estimate the taxable consequences of placing a trade using the Maxit tool, which is available at no additional charge.
The managed portfolio offering has a well-designed asset allocation display, but that feature does not extend to the self-directed investing account. For more on Ally Invest's robo-advisory which manages the portfolio in conjunction with investment professionals, check out our review of that specific feature.
One area where Ally Invest’s greater focus on the retail investor is most apparent is in the education offerings. Ally Invest offers live and online webinars as well as other online information, including an entire Learn section on Ally.com that has a wide array of investing and personal finance topics, from stock and options trading to banking products. For the active trader, options guru Brian Overby hosts a weekly podcast with Options Insider Radio. Ally Invest holds an average of 15 webinars a month featuring in-house experts as well as others from around the investing world. Recently Ally Invest added monthly educational blog posts on the Ally Community Hub offering perspective on the markets, and a weekly YouTube live streaming show called Stock Play of the Day hosted by Brian Overby and Lindsey Bell.
In 2020, Ally Invest launched quarterly day-long live-streaming digital conferences, offering free educational sessions hosted by Ally Invest President Lule Demissie and Chief Investment Strategist Lindsey Bell. These conferences offer sessions for investors of all skill levels. Full recordings of the sessions presented so far, on March 11, 2020 and June 24, 2020, can be found on Ally Invest's YouTube channel.
Demo trading accounts are not included in the offerings. There is no life event advice to guide clients through major changes such as marriage, buying a house, or college planning.
- Ally Invest has a phone line, which is available 24/7. Ally reports an average of 30 seconds on hold.
- Online chat is available on the website for current and prospective clients
- You can talk to a live broker on the phone.
- The Help Center on the website is light on detail. You can send a secure email if you don’t need an immediate answer.
- Only U.S. residents can open accounts.
- Two-factor authentication is available for logins.
- Biometric entry can be used for Ally Invest mobile apps.
- Ally Invest’s clearing firm, Apex Clearing, carries excess Securities Investors Protection Corporation (SIPC) insurance provided by Lloyd’s of London that insures up to $900,000 in cash per client and a total of $37.5 million in assets, with a cap of $150 million.
- No significant breaches were reported for 2019 by the Identity Theft Research Center.
Ally Invest is focused on providing tools that are convenient and easy to use at an affordable price, with an eye on its fast-growing millennial user base. However, the customers inherited in the TradeKing acquisition are finding fewer resources for options analysis and trading while the firm adds on services for buy-and-hold investors. Development efforts for Ally are primarily focused on removing the technological walls between the banking and investing features, with special attention paid to customers who are new to investing. That leaves the legacy options traders who became Ally Invest customers in 2017 somewhat high and dry as features stop evolving while other options-centric platforms add features.
While Ally Invest is still a usable trading platform, it has been surpassed by more focused and customizable competitors depending on what type of trading you are looking to do. It is also somewhat late to the game on the retail side. That said, it has made up a lot of ground in a short time. This is particularly true when it comes to the managed portfolio solutions, but even do-it-yourself investors will find all the basics to create and manage their own portfolio. If you already have a financial relationship with Ally Bank, then Ally Invest makes a strong case to be your broker as well.
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