Ally Invest Review: Are They Legit and Good for Beginners?

As you begin investing your money, you’ll realize that there are many assets and platforms to consider. 

It can be a bit overwhelming for a newbie, but fortunately most of the investing platforms out there are quite good — like Ally Invest.

Ally Invest offers newbies, experienced traders, or passive investors options to succeed and reach their financial goals much easier. 

Below in this Ally Invest review, I’m going to cover more about the company, their Self-Directed Trading and their Managed Portfolios — either of which could be the right option for you.



Quick Review:  In short, I RECOMMEND Ally Invest. It is a solid investing platform with various options, and I give it a 8.8/10 score. You can sign-up here for Managed Portfolios or here for Self-Directed Trading.



What is Ally Financial?

Ally Financial or “Ally” is a financial company that was founded over 100 years ago that offers financial products for consumers, businesses, automotive dealers and corporate clients. 

And since those early days, the company has become one of the leading online banking and financial companies. 

They offer online banking with great interest rates, financing and leasing options, fixed and adjustable rate home loans, corporate financing, and investing options. Almost 9 million people are using some form of Ally’s services.

Ally Invest Managed Portfolio

Investing With Ally

Although Ally offers a plethora of services, this review is primarily focused on Ally Invest — one of their growing divisions. According to their website, they currently have over 370,000 customers utilizing their investment products!

With Ally Invest, you have two options with them: Self-Directed Trading and Managed Portfolios

Self-Directed Trading

The Self-Directed Trading account is simply for investors who want to manage their own portfolio and like to be hands-on. 

With Ally’s Self-Directed Trading, you’ll have access to $0 trading commissions, tools to help you research investments, access to ETFs from Vanguard, GlobalX, and iShares too.

You can diversify your portfolio too as with a self-directed account you have access to stocks and ETFs, Bonds, Mutual Funds, and even Options. 

While stocks and ETFs have $0 commission fees, you will have some fees with the other investments.

For example Bonds have a $1 commission per bond and mutual funds will cost you $9.95. So keep that in mind if those interest your portfolio. 

Can I day trade on Ally?

You might be wondering if you can trade on Ally with a self-directed account. Typically, Ally is not used for day trading but if you do start, you’ll be required to have a minimum account balance of $25,000 to have day trading privileges. 

Personally, I’m not a fan of day trading nor do I talk about it much. If you want to know more about day trading on Ally, read their disclosure here

Learn More and Sign-Up for Self-Directed Trading

Managed Portfolios

If you have been doing your research about investment platforms, you’ve probably come across robo-advisors. 

These are algorithm-based portfolios created based on personal needs and questions you answer. From there, you can be hands off as the company handles your investments for you. 

Ally Invest’s Managed Portfolios are similar in a way, but the company considers it “automated investing” and the portfolios are designed by human experts. Here, you can get started with a $100 minimum investment and pay $0 in advisement fees. 

You have four portfolio options to choose from:

  • Core: For more hands-off investors, highly diversified across domestic, international, and fixed-income assets.
  • Income: portfolio of higher dividend yields, but also for a more conservative risk profile.
  • Tax Optimized: If you are making after-tax contributions to an investment account, this type of IRA can maximize your investments. 
  • Socially Responsible: If eco-friendly is your thing, then this portfolio might be for you. These are investments in businesses that practice sustainability, energy efficiency, or are focused on environmentally friendly practices.

Getting started with a managed portfolio is easy and takes less than ten minutes. You answer some questions about your investing goals to get a recommended portfolio. 

You can choose that recommendation or make some tweaks of your own, then you get started with a minimum of $100 and Ally Invest handles the rest for you.  

Learn More and Sign-Up for Managed Portfolios

Investment Choices at Ally Invest

With any investment platform you choose, you want to first be aware of the investment options you have. Pending your financial goals and interests, having diverse options to invest in will be important. 

Ally Invest offers a few different assets that you will have access to. Remember though, with managed portfolios their expert team will be picking your investments based on your interests. 

Stocks: 

Naturally, Ally Invest offers the most common type of investment with stocks. They have thousands of stocks to choose from and various ways you can invest in them too. $0 commissions and no account minimum to get started.

Bonds: 

When you invest in bonds, you are essentially loaning to the government or a corporation, which earns you interest. With Ally Invest, you can access bonds at $1 per bond and starting at a $10 minimum. 

ETFs:

Instead of individual stock or bond picking, you can choose ETFs. These assets are made up of a collection of stocks, bonds, and other investment types.

Now you can invest in an entire industry and be more diverse in one fund. I personally like ETFs myself. Ally Invest offers commission-free ETF investing, which is great! 

Mutual Funds:

Mutual funds include money from multiple investors to purchase a group of securities. These investments are also diversified across a number of assets and often lower risk than other investments.

Ally Invest allows you to choose from over 12,000 funds. The downside is some may charge a fee and it will cost you $9.95 per trade. 

Options:

Typically not for beginners and something I would avoid are options.

However, just note that Ally Invest does offer these as investments you can dabble in. $0 commission fees and will cost $0.50 per contract.

Essentially, options are contracts that give you the right to buy or sell an asset (like stocks) at a fixed price for a specific period of time. 

Cash:

It’s worth mentioning that if you choose to go with a Managed Portfolio option, Ally Invest offers to set aside 30% of your investment to a cash buffer. This is to help protect you against marketing volatility.

What’s cool about this option is there are no advisory fees, and the 30% buffer also earns you interest. That way, your money is still going to work a bit for you.

Ally Invest Pros and Cons

Since there are two different investment account choices with Ally, it was easier to combine the pros and cons of the overall investment choices.

Hopefully some of these insights can help you make an informed decision if one, both, or none of these accounts are right for you!

Ally Invest Pros:

  • No advisory fees on Managed Portfolios
  • Low minimum entry to get started
  • Detail reporting and charts via web and mobile
  • Member of the Securities Investor Protection Corporation (SIPC)
  • Mix of low cost, diversified exchange-traded funds (ETFs)
  • Options for taxable account or IRA (Traditional or Roth)

Ally Invest Cons:

  • Online broker only, no physical locations
  • Do not have a practice trading platform
  • No transaction-fee-free mutual funds
  • You can trade only on US markets
  • Fee for transferring or closing IRAs

How Safe Is Ally Invest?

Ally Invest is safe to use and opening investing accounts with. Not only has the company been around for over 100 years with approaching 9 million customers, but they offer protections for their investors. This includes being a member of the Securities Investor Protection Corporation (SIPC). 

Is Ally Invest Good For Beginners?

Ally Invest can be a great option for beginners when it comes to investing. They make opening an account easy, explain their steps, and have clear information to help you make the right investment portfolio decision for you. 

It’s also a great option for those who have more hands-on experience and are looking to control their portfolios a bit more. So even if you have experience in investing, you have a home with Ally Invest’s Self-directed trading. 

However, if you are an advanced stock trader or investor you may want to look elsewhere. Some of their tools are limited and you may want more freedoms with trading. 

Should I Invest With Ally?

Ally is one of the most trusted financial companies in the world and has a strong track record that dates back 100+ years. The company continues to innovate and create products to help you reach your financial goals.

That said, investing with Ally is a personal choice that will depend on your unique situations. I recommend them for beginners and those looking to find a new place to put their money to work.

Ally Invest

8.8

Overall

8.8/10

  • No advisory fees on managed portfolios
  • Low minimum entry to get started
  • Mix of low cost, diversified exchange-traded funds
  • Options for taxable account or IRA (Traditional or Roth)

  • Online broker only, no physical locations
  • No transaction-fee-free mutual funds
  • Fee for transferring or closing IRAs