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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Those looking to create an Ally Invest account but already have an existing account elsewhere must submit a Brokerage Account Transfer document. You will also need to provide a recent statement of the account that you would like to transfer in. These document can be faxed to Ally using the number 1-866-699-0563 or can be mailed to Ally's address. These transfers can take up to 7 days to complete.
Personal checks can take as long as 3 business days to clear from the day that it was posted. Cashier's checks, on the other hand, are made available for trading as soon as we receive and post them.
Deposits must clear before they can be used to trade with. How fast these deposits clear depends on how they're deposited. Bank Fed Wires are cleared to trade the same day that Ally receives it. Bank and Cashier's checks are cleared the day they're received as long as they can verify the check number and amount with the bank it is taken from. Transfers are cleared within 3 business days of the deposit.
Real-time quotes are automatically enabled for funded accounts.
Price alerts can be set up by going to tools and then alerts. From there you can collect the symbol, trigger, condition, and the price for the alert. Alerts come in the form of pop-ups when you are logged in.