Ally Invest (formerly TradeKing) Review 2018

By John A. Jagerson  | January 11, 2018

Ally Invest focuses on low costs and a broad product offering which will likely appeal to active stock and option investors.

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Overall Rating

3.5/
5.0
Products & Fees
4.0
Trust
4.2
Special Features
1.7
Desktop Experience
4.0
Mobile Experience
4.2
Customer Support
3.1
Research & Insights
2.8
Education
2.7
Banking
5.0

Ally (formerly TradeKing) Fast Facts

Ally Bank expanded into the brokerage business with their Ally Invest brand by acquiring the online broker TradeKing in 2016. TradeKing had been known for its focus on the active investor segment. The combined entity still appears to be oriented toward the active investor/trader with a focus on low costs, a streamlined web-based platform and support for complex order entries. Ally's trading and analytical tools aren't best in class, but we believe they will likely fit the minimum requirements of most individual stock and options traders. Along with stock, options, mutual funds and ETFs, traders can access the futures and Forex markets through their Ally Invest account. We found fewer features for longer-term portfolio managers and fund investors than some other competitors in the industry. For example, while they now offer over 100 commission-free ETFs, ranging from all WisdomTree ETFs to environmental, social, and governance ETFs, they do not offer free trading in funds or maintain a physical branch office network.

pros

  • Low Costs
    A simple commission structure of $4.95 for stock and ETF trades and $4.95 + $0.65 per contract for options. The availability of other commission-free ETFs are a bonus.
  • Web-Based Platform
    Not all features from the former TradeKing LIVE platform are "live" at Ally yet; but charts, option analytics, and screeners are easy to find and use.
  • Stocks, Options, Forex, Futures, Bonds, ETFs, etc.
    Investors can use one account at Ally Invest to manage all their trading in virtually any asset class.

cons

  • Limited Education Materials
    The content was not particularly comprehensive or easy to use.
  • No Physical Branch Network
    There aren't branch locations allowing investors to visit with a broker in person.
  • Tools are Good, But Web Platform has Limitations
    Charts, watchlists, and analytics are all there, but advanced traders may prefer a more robust, client-based, software application.
2017
Re-Branded
$4.5 Billion
Assets Under Management
(Acquired TradeKing, as of Sept. 2017)
16,600
Average Traders Per Day

Products & Fees

4.0

Commissions for stock and ETF trades start at $4.95, but higher-volume traders can push that down to $3.95. Option trade commissions start at $4.95 + $0.65 per contract and can also be reduced for high-volume traders. Fees and costs are similarly competitive for bonds, futures and Forex trading. Expenses rise when Ally Invest is compared to other brokers for mutual funds and ETF trading. Investors with a longer-term focus may not be as impressed with a commission structure oriented toward more active, short-term traders. Fortunately, there are over 100 commission-free ETFs available for trade if you would like to avoid commission costs.

Ally users will enjoy a high-volume discount, no monthly inactivity fee, and free extended-hours trading. No initial investment is required for a self-directed account, but a managed account requires an initial investment of $2,500.

  • Stocks*
    $4.95
  • ETFs*
    $4.95
  • Options
    $4.95 + $0.65 per contract
  • Futures
    $0.45 per contract**
  • Forex
    Bid-Ask spread cost
  • Mutual Funds
    $9.95 for no-load funds
  • Bonds
    $1 per bond ($10 minimum)
  • CDs
    1-year CDs starting at 1.35%
  • Penny Stocks
    Fee + $0.01/share
  • International Trading
    Not Available

Trust

4.2

Ally Invest is a member of FINRA and SIPC which provides oversight and account protection for customers. The web-based platform is password protected and a special security key must be entered when logging in from a new or different device. Ally Invest acts as an introducing broker to GAIN Capital for its Forex accounts, which is subject to regulation by the CFTC and NFA. Ally Invest also acts as an introducing broker for Wedbush Securities for futures accounts, and Wedbush is also registered with the CFTC and NFA.

Up to $250,000
Total Cash Insured
(Ally Invest is a member of the Securities Investor Protection Corporation (SIPC), and funds are available to customers for up to $250,000 in cash claims)
Up to $500,000
Total Securities Insured
(Funds available through the SIPC cover securities (plus cash claims) of up to a total of $500,000)
Up to $37.5 Million
Additional Insurance
(Ally has coverage from a group of London Underwriters (including Lloyd's of London) for an additional $37.5 million of cash and securities protection)

What you need to know

Ally Invest's regulatory oversight and registration is standard within the industry. Additional insurance protection is good, but payouts in the unlikely event of a default are uncertain. We would like to see more security on Ally's web platform, though we recognize it is always a difficult balance providing additional security without making access challenging or difficult for regular customers. However, we believe many traders would prefer and appreciate the option to use a security token or other measure when accessing their account.

Special Features

1.7
 Ally invest special features

Backtesting capability, auto-trading and order routing guarantees were missing from their platform and therefore hurt Ally's rating in this portion of our review. Automated, managed portfolios (so-called "robo advisors") are available for investors with a minimum account balance. Tools to evaluate the performance of the robo-advisors were easy to access and we felt presented their potential performance in a realistic way. We have included a few other interesting features in this review, not included in the core criteria for our ratings, that more active traders may appreciate.

Trade Alerts
Customize alerts to let you know when a price has been hit
Robo Advisor
Flexible, automatic portfolio plans to manage your long-term goals
Fixed-Income (Bond) Searches
Tool to search and select bonds that fit your objectives
Developer API
Software tools can be built to access Ally Invest's trading platform

What you need to know

The deficiencies in this category were surprising considering Ally's focus on active investors. The Forex platform from GAIN Capital does include some of the missing functions, like backtesting, but it unfortunately only applies to currency traders.

Desktop Experience

4.0
Desktop Platform Experience

Although the broker is focused on short-term, active investors, its web-based trading platform does not seem as competitive as might be expected. However, core functionality that active traders look for was included and we did find them easy to use. The platform is web-based and slightly trimmed down from the functionality previously available at TradeKing. It was very fast, and we liked that the features weren't hidden under a labyrinth of lists and sub-menus. The mobile application was very similar to the web-platform which made trade management a seamless experience.

Pros

Because the trading platform is browser-based we didn't have any issues running it on different computers. Features on the "dashboard" could be arranged to suit our needs and it was simple set up watchlists, charts, and order entry modules. The platform has flexible defaults that can be changed, and the color theme was customizable. Option analytical tools were a little cumbersome to use, but they were full-featured and flexible. Enlarging the type face and increasing the spacing between the trading modules will be a benefit for investors who struggle with too much information on a crowded screen. The charts had an excellent selection of technical indicators and settings that could be customized and saved as a profile.

Cons

The platform's more advanced tools were robust, but traders will have to get used to a lot of scrolling to see all the information in each tool. Some modules, like charts, could be detached from the dashboard so they could be blown up to full-screen; however, those settings couldn't be saved and reused the next time the application was opened. While the platform's step-by-step process of analyzing an option or stock will help shorten the learning-curve for new traders, we expect that this process will seem nothing but cumbersome to more experienced investors.

Mobile Experience

4.2
Mobile Platform Experience

Ally Invest's mobile application was very similar to the web-version without some of the more advanced tools like options analytics. The charts were rendered clearly and were easy to flip from portrait to landscape mode. Modifying or entering trades was similar to the web-platform and was very easy to navigate. Security settings were flexible and could be adjusted to the user's preferences.

Pros

Charts and order entry were easy to use and made good use of the limited screen size. Watchlists could be created and edited on the mobile app that were coordinated with the web-platform. Complex option orders and spreads could be created through an easy to follow step by step process. In our opinion, it is possible for a trader to accomplish nearly any strategy within the mobile app that they might otherwise enter in the web version.

Cons

While the mobile app was coordinated with the web-application, we found that it took some time before changes to watchlists and other features were updated in both places. For example, we had to log out and then log back into both platforms to see changes to watchlists synchronize between the two environments. The mobile app doesn't open directly into the trading functionality when it's first launched so an investor must navigate to that feature from the initial "Account Snapshot" page that opens by default.

Customer Support

3.1

Support is available 24/7 through phone, email, and chat. We found call hold times during market hours to be long; however, chat was extremely responsive and helpful. The help-link inside the trading application defaults to knowledge base-style articles, so an investor will need to locate the contact link at the top of the site to reach a live person. The customer service representatives we talked to were courteous and knowledgeable.

What you need to know

The chat function was the most reliable way to get an immediate answer about the trading application or for basic account questions. For more in-depth questions requiring a broker phone support was available but hold times were long. We were impressed with the courtesy of the representatives and they seemed knowledgeable about the platform and account features at Ally Invest.

Research & Insights

2.8

There were limited tools available for research and insights besides the news feeds and analytical tools inside the platform. There is a stock screener on the TradeKing.com domain that was still accessible, but it was disconnected from the trading platform. The technical analysis tools were very good and there was a lot of value in the option strategy tools; but, according to the representatives we talked to, fundamental tools like financial statements are part of a project that is still being developed.

Technical Charts
Price charts with customizable indicators and settings can be modified and saved.
Bond Screener
Search for bonds and fixed income investments in any category.
Option Profit and Loss Graph
Evaluate the potential upside and risk of any option strategy.
Option Strategy Workbench
Setup an option trade one leg at a time to evaluate the Greeks.
Chart Annotations
Write on the charts and save them for future reference.
Fibonacci Analysis and Drawing Tools
Apply Fibonacci retracements and other drawing tools on the charts.

Pros

In our opinion, the option analytical tools in the web-platform are the best feature in the Research and Insights category. It may take more clicks and scrolling than experienced investors would like but new option traders will have a shorter learning curve to master these tools. The bond screener will probably be more interesting to long-term investors. But it worked well and was easy to navigate. The news feeds in the web and mobile platform were comprehensive and refreshed quickly which we think short-term traders will appreciate.

Cons

There were almost no fundamental tools available. Investors will not find financial statements or most financial ratios in the current platform. The stock screening tool was good, but we are concerned that its life outside the regular Ally.com domain means it may not be here for long. In either case, the stock screening tool did not include ETF or fund screeners and was disconnected from the trading application.

Education

2.7

Once logged into the trading platform the education section was difficult to find. After logging out, it was easier to access a whole sub-domain (www.ally.com/do-it-right/) of educational articles covering investing and personal finance. We did not find the content to be particularly comprehensive or easy to use. Many of the investing articles were very long and included few illustrations or videos. This section could be useful for reference, but we wouldn't expect a new investor to become any more proficient in the markets with these limited resources.

Investing Articles
Basics
Learn a few basics about technical and fundamental analysis
Personal Finance Articles
The Importance of Saving
Don't skimp on learning more about how to hold onto your money
Strategy Articles
Learn Advanced Strategies
See how some advanced option strategies are used in the market

What you need to know

There was a broad variety of education (mostly articles) available on stocks, options, and personal finance in the education section at Ally.com. Unlike most other brokers, Ally also includes content on personal finance topics. Most of the investing articles lacked useful illustrations or videos to help the reader understand the material. The content wasn't organized by difficulty levels so new investors may struggle to navigate the material.

Banking

5.0

Ally Invest is owned by Ally Financial, which also owns Ally Bank. The bank has all the products and features one would expect, like checking accounts, home/auto lending and CDs. The bank doesn't have a local branch network but the online tools for deposits and account management were very good. The Ally Bank web account management and mobile app worked together seamlessly.

Quick Depost
Ally eCheck Deposit
Deposit checks by just snapping a picture
Send Money
Zelle Payments App
Use Zelle like the "Cash App", or Venmo
Pay Bills
Online Bill Pay
Schedule payments online and in advance
Savings
CDs and Money Markets
Earn industry competitive yields

What you need to know

Ally Bank was rated the best Internet bank by Kiplinger's Personal Finance Magazine in 2017. The product line is comprehensive for clients who aren't concerned about the lack of local branches. Branding themselves as a "millennial" bank, the target market seems clear and, in our opinion, they are focused on the things an online customer would want. The connection to Ally Invest is convenient for traders and makes account management easier.

Bottom Line

Ally Invest has a lot going for it if you are a short-term investor, focused on stocks and options trading, and concerned about lowering your trading costs. Tools like charts and option analytics were very good and will be easy for newer investors to use. The mobile trading experience was excellent and blended well with the primary, web-based platform. The connection to a full-featured online bank is convenient for investors who don't care about local branches. While there are some missing features (i.e. robust education, commission free funds, etc.) traders will find that what Ally does well, they do very well.

John A. Jagerson
Reviewed by John A. Jagerson

  • • 15+ years experience in stocks, options, Forex, bonds and portfolio analysis
  • • Co-founder of Learning Markets, LLC, a leading creator of financial content, analysis, education and tools
  • • Author of four books on investing and portfolio strategies published by McGraw Hill

Experience

John has worked in the capital markets and private equity for most of his career—including investing, writing, education and money management. John has a B.S. in Business Administration from Utah Valley University and completed the PLD at Harvard Business School. John is the coauthor of three books published by McGraw Hill on investing and portfolio management. As a co-founder of Learning Markets, LLC, John has developed financial education used by thousands of brokerage clients to become better investors. His firm also develops professional-grade stock screening and analytical tools for individual investors.

Education

John earned his bachelor's degree in accounting and business management at Utah Valley University.

Professional Designations

John is a Charted Financial Analyst (CFA) and a Chartered Market Technician (CMT).

Quote from John

"Individual investors have goals and objectives beyond wealth accumulation. Investing is only one tool they use to achieve truly great things in their life. I am passionate about helping investors because their success means more than just a larger account balance."

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Learning Markets, LLC

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