Ally Invest Review

The Cons

• Although the platforms are excellent, there are inconsistencies. Option trading and stock/ETF trading are available on all platforms. Fixed income and mutual funds, however, are not. Although the primary Ally Invest account page has a more modern design, it still offers some features such as screeners and options analysis tools that are not available on streaming or mobile platforms. It is regrettable, as many traders prefer streaming platforms to traditional legacy websites. However, both will be required to access all features.

• Some trading products may not be available on all platforms. Only stock, ETF and options trading are supported by the mobile app. The mobile app does not support screeners or advanced options tools.

• Ally Invest doesn't support trailing stops and contingent orders. For example, you can attach profit-taking or stop-loss levels as part of an initial limit order. This causes the trader to have to create a new order to set up stop-loss/profit-taking levels after a purchase order has been filled, and to also manually cancel one of these orders when the profit loss or stop is activated. This functionality is already available in the latest trading modules. It would be great to have this added to Ally's platform. Trailing stops and contingent orders are very popular tools for traders, so Ally Invest has been able to keep up with other online brokers in this area.

• Ally Invest doesn't support futures or cryptocurrency trading on its platforms.

Useability

Ally Invest platforms are reliable, even though they use outdated technology and may require multiple screens/platforms at once. You will always be taken to the Ally home screen when you sign up for your first website. This screen displays all accounts related to the Ally Platform. All accounts would be displayed on this page. Click on an individual investment account to go to Ally Invest's home page. You can switch between self-directed and managed brokerage accounts via the Ally Invest page.

You will find a link at the top of Ally Invest's homepage to launch Ally Invest Live, which offers streaming quotes and has more advanced website functionality. Even though the primary website is a little outdated, it still works well. It's responsive and can be refreshed quickly. The menus at top of the website page were intuitive and easy-to-use. Usually, there were at least two levels of submenus depending on the topic. However, there were a few occasions when the top menu bar vanished. Although hitting the Ally logo at the top of the page takes you back to your account summary page it was confusing to lose the primary menu.

You can customize the look and feel of the Live platform. The Ally Invest Live mobile app and Ally Invest Live streaming platforms have a modern, robust design. However, these platforms did not have all the functionality features of the primary website. The Live platform only has the ETF screener, while none of the screens are available on the mobile app. Options trading, analysis tools for profitability graphing and pricing, along with legacy tools from TradeKing, are not available on the Live platform or mobile app. Charting on the Live platform is better than that on the mobile or website platforms.

This creates a mix of platforms that can be used for different purposes. Despite this, navigational functionality and menus are easy to use and intuitive. It was easy to open trading windows, news and charts for securities on a watchlist or from one of our screeners. They are consistent across all platforms and websites. There is another platform for foreign currency traders. However, it is quite common for brokers that offer currency trading to use a platform specific to this market.

Trade Experience

Ally Invest's trading platform is adequate for most traders. However, it lacks basic functionality for orders. None of the platforms allow you to place contingent orders to take profits or stop losses. There is also no support for trailing stops. The trader must wait for a fill to place a stop order. You can't sell security in cash accounts. These types of contingent orders are supported by newer platforms.

Strong menus make it easy for you to find the right type of securities to trade in. You can also select a strategy, such as a bull Spread, straddle, or four-leg strategy, and then proceed to other trade components. Ally Invest does not offer automated trading or order routing. You cannot also create custom orders using other criteria than price (limit orders), like volume or percentage moves. Although you can open an order ticket directly from a chart page it only opens a ticket with the symbol pre-populated. There is nothing dynamic about charting, such as the ability to show current orders or drawing tools. Although the options analysis tools are available on Ally Invest's website, they were not available on Ally Invest Live. This made it a little awkward, even though they can be very useful. Open orders and order status were comparable to other online brokerage platforms.

Mobile Experience

Although the mobile app for Ally Invest works well, it lacks a lot of functionality. The mobile app does not allow you to trade in stocks or ETFs. There are no other options. Fixed income and mutual funds trades must be done online. You can view recent activity and transfer assets among Ally platform accounts. This includes between an interest-bearing Ally Bank savings and Ally Invest accounts. You will also find key menu items at bottom of screen that allow you to view account holdings, trade, orders, research and watchlists.

Investors can choose from stocks/ETFs or options in the trading area. You can choose a security from your watchlist, or enter a symbol onto the trading screen. Then, the appropriate menu will appear to allow you to buy or sell, type of order, levels, etc. You can choose an option strategy, and then be prompted to select the strikes you wish to change. Once you have entered the necessary data, the order entry screen will take you through the order review and confirmation process.

A research page is also available on the mobile app. It contains news headlines, quotes, market indices and performance for the current date, as well as a list NYSE market movers. The mobile app did not have screeners, but you could select a security to access useful technical data and fundamental information. The mobile app is likely to meet the trading needs of traders who already know what they want. The website will provide limited information and charts when searching for individual securities. However, investors can search the site using all of the screeners and other tools to find investment ideas.

A wide range of offerings

Ally Invest offers trading in US-listed equities and ETFs. Options, mutual funds and fixed income products, including US Treasuries and CDs. Corporate, municipal and agency bonds are also available. Ally Invest offers foreign exchange trading in over 50 currency pairs through a dedicated platform. However, they don't offer futures, cryptocurrencies or fractional share trading and do not offer international securities that aren't listed on US-based exchanges. Ally Invest allows investors to trade the following:

• Stocks short and long

• OTCBB

• ETFs

• List Options

• Mutual Funds

• Fixed Income: US Treasury Securities, corporates and municipals, U.S. agency certificates, certificates of deposit

• Foreign Exchange (More Than 50 Currency Pairs; Ally Invest Forex Application)

• Ally Bank Accounts (interest bearing, but the investor must proactively transfer funds from and to his/her investment account).

Types of Order

All platforms offer the basic order types market, limit, stop and stop. The website also offers market on close. The website and mobile app do not support the creation of contingent orders. This includes adding stops or profit-taking levels to limit orders. Trailing stops are currently not available on Ally Invest's platforms. All trading platforms allow options orders to be placed for four-leg option strategies. A dropdown menu is available in the symbol field to show current holdings when selling. All or nothing was the option for orders on this website. However, it wasn't available for Ally Invest Live and the app.

Trade Technology

Ally Invest's trading technology is functional and well-designed. However, the website could use some updating. All platforms support four-leg option strategies. Streaming quotes are not available on the primary website. This seems to be a common feature on many platforms. The order entry system was simple and it does not integrate orders or positions into charts. Ally Invest does not offer order automation or control over the routing of orders.

Ally Invest's primary website is the link to Ally Bank. This bank offers the opportunity to earn interest on cash balances and has some of the most competitive short-term rates. The options trading process is different across platforms. Ally Invest requires that you use all of the tools. You can see probabilities of a market moving within or outside of a specified range and date. Additionally, profitability graphs are available for different dates. This allows you to compare the profit graph at maturity to the price graph for the option. These tools, while not the best in class, are useful and not often offered by online brokerage sites.

Prices

Ally Invest's trading costs are competitive. They include zero commission trading of Stocks and ETFs. Options trades cost $0.50 per contract.

• Stocks and ETFs: No Commission

• OTCBB (and stocks less than $2.00): $4.95 plus $0.01 Per Share; maximum commission per order is not to exceed 5% trade value. Minimum $4.95 plus $0.01 Per Share OTCBB and Pink Sheet stocks require a minimum purchase of $100.00.

• Options: $0.50 per contract. There is also a $0.50 charge to close low-value options positions

• Mutual Funds: $9.95 per trade, no load

• Fixed Income - $1 per Bond, with a minimum of $10 and maximum of $250 per transaction

• Robo-Managed accounts - minimum $50 investment There is no management fee for Cash-enhanced portfolios that have 30% of their assets in cash. Other algorithm-created portfolios will incur a 0.30% annual fee.

• Margin rates vary depending on account size.

• Foreign Exchange - Commission free

• Account Closing – None (except ACAT Fee).

• Transfer an account out - $50

• Live Broker Trading – Ally reserves $20 for broker-assisted trading, but Ally informs that this fee is very rarely charged.

• Domestic Wire Transfers: $30 to send a wire, no fee to receive one

• Sending checks - $5 fee

• Voluntary Reorganization Fee (for Corporate Actions) - $50

• Inactivity and Maintenance Fees: None

How this broker makes money for you and from you

Ally Invest does not charge commissions for ETF and stock trading. It's becoming less clear how brokerages make their money, with fewer charging commissions. Ally Invest, like other online brokers that offer commission-free trading (but not all), receives payment for order flow. It does not offer portfolio margining or fractional shares. Ally Invest accounts can also be linked to an Ally Bank account, which allows investors to earn interest on cash balances. These are just a few of the many ways Ally Invest can make money for you.

• Price Improvement While Ally Invest customers cannot route their orders through a live broker because they can't place their orders directly, Ally's average net price increase is $0.0103 per share. This includes all eligible marketable SEC Rule 605 orders. The net price increase for options is $0.07 per contract.

• Order Flow Payment:Ally Invest is paid for order flow. Ally Invest received an average $0.00214 per share in equity trades, while the order flow payment for option orders was $0.45 per contract. This places it at the lower end for brokers who receive PFOF.

• Interest on Cash Balances:Ally Invest provides competitive interest rates for cash balances that are transferred from an investment account to a linked Ally Bank Account (currently 2%). To earn interest on cash balances, the client must make transfer to and from the bank account. Daily transfers of up to $250,000 to or from the Ally Invest account are possible.

• Securities lending: Customers can earn additional money with Ally Invest by selling shares in an account that is used for securities lending. However, customers cannot choose specific stocks to lend.

• Initial Cash Balance Payment:Ally Invest will pay investors more if their initial account funding exceeds $10,000. Seven payment options are available. $100 is for a $10,000 balance, and $3,000 for accounts with more than $2 million. After 60 days, accounts are reviewed to determine the level. Ally Invest will not release the account credit for 300 days. This allows Ally Invest to keep the account and stop people simply moving assets in exchange for an incentive payment.

Education

A drop-down menu in the Education section allows you to choose from stock, options, mutual funds, ETFs or forex, and also offers options for learning about market outlook (bullish/bearish, neutral, volatile). These logical menus didn't correspond with the content. Instead, almost all the links in this drop-down menu led to Ally's community webpage.

These pages had a lot of useful content, including how to invest in three easy steps and how you can become a better investor. However, the information was not organized in an logical manner. Based on the date it was created, different pieces of content were listed. Although the content is solid and targeted at new investors and traders, it wasn't as specific or deep as the menu choices indicated.

The community page of Ally Invest also contains content on life, money and home. Each of these content areas can be customized to create a community page. For example, under money you can filter topics such as budget, credit and estate planning. Blogs, market updates, as well as the possibility to connect with other Ally Invest traders are all available.

Customer Service (For Investment Services)

• Phone line available 24/7

• Average hold time is 30 seconds

• Chat available via live chat

• Social media can provide assistance

• Only residents of the United States can open an account.

Security

• Ally Invest provides two-factor authentication on its platforms. A biometric login is also available on the mobile platform.

• Securities Investor Protection Corporation (SIPC), insurance for accounts, is bolstered with a Lloyds of London Policy purchased by Ally’s clearing firm. Ally’s customers have coverage of $150,000,000 for securities and cash in case SIPC lines are exhausted.

• Ally Invest has never had any data breaches over the past four years.

• Ally Invest experienced notable outages during the GameStop frenzy in 2021. This was something that affected many brokerages. Since then, no outages have been reported.

Transparency

Ally Invest lists clearly on its website its commissions and fees. Ally Invest's attractive rates and low fees are a major part of their marketing strategy. You can find an overview of margin trading by clicking on the "Client Services" tab at the top. A second page answers questions about margin trading. A disclosures page with content from FINRA is also available.

There are many account types available

Ally Invest offers all of the most commonly used account types including:

• Taxable for both individuals and jointly

• Custodial

• Individual retirement accounts (IRAs) for traditional and Roth individuals

• Coverdell Education Savings Accounts (ESA)

The individual trading account is best suited for those who aren't saving for retirement or college. Ally Invest Wealth Management has been launched by Ally Invest. This account is for individuals with more than $100,000. It charges an advisory fee of 0.85% of the assets under management.

Final Verdict

Ally Invest is a good choice as they offer intuitive and well-functioning investment and trading platforms, very competitive commissions and fees, and high margin rates. They also provide plenty of support to investors in choosing investments via various screeners and options analysis tools. Stocks/ETFs and options are exempt from commissions. Options, which cost $0.50 per contract are the lowest end of the commission range.

Although the website is somewhat outdated and has some inconsistencies and inconveniences between platforms, recent updates to the main menu, improved mutual fund order flow, updated support functionality and a redesigned app on mobile show that the company is committed to improving the customer experience. Ally Invest offers tools that allow you to analyze options and are not available at other brokers. Ally Invest is a great choice for active traders who are looking for low margins and low costs, as well as new investors and Ally Bank customers that use the online banking service. Active traders might not be able to use Ally Invest's trailing stops or conditional orders.