What Ally Invest is
Online broker Ally got its starts roughly a century ago in the auto industry as General Motors Acceptance Corp., or GMAC. Offering car loans to Chevy buyers was only the start, though; by 2000, GMAC was deep into mortgage banking and other consumer-facing services.
Ally's cost structure can get even cheaper for active traders, though. Active investors qualify for a discounted rate of $3.95 per equity trade and $3.95 per options trade plus $0.50 a contract. Specifically, the threshold is 30 trades a quarter – or 10 a month – or a balance of $100,000 or more.
That's not exactly populist, but it is reasonably accessible for investors who are moderately serious but perhaps not a Wall Street fat cat making dozens of trades a week with a million-dollar portfolio.
If you're a buy-and-hold investor focused on funds then perhaps Ally isn't a great place for your money. But even rookie traders will like the low cost structure and the incentives that unlock once your portfolio and activity reaches a moderate level.
What Ally Invest costs
Ally's standard pricing for stock trades is $4.95, and options are $4.95 plus an additional $0.65 per contract. There are no commission-free ETFs, but this low pricing structure still makes it possible to invest in funds fairly effectively.
Ally's cost structure can get even cheaper for active traders, though. Active investors qualify for a discounted rate of $3.95 per equity trade and $3.95 per options trade plus $0.50 a contract. Specifically, the threshold is 30 trades a quarter – or 10 a month – or a balance of $100,000 or more.
That's not exactly populist, but it is reasonably accessible for investors who are moderately serious but perhaps not a Wall Street fat cat making dozens of trades a week with a million-dollar portfolio.
If you're a buy-and-hold investor focused on funds then perhaps Ally isn't a great place for your money. But even rookie traders will like the low cost structure and the incentives that unlock once your portfolio and activity reaches a moderate level.
What Ally Invest offers
Ally's platform was built largely on the acquisition of TradeKing – a discount offering that was growing fast thanks to great service, low costs and helpful tools.
Keeping the good parts of TradeKing is a big win. But Ally also invested in building an even more robust platform that truly can serve investors who are serious about stocks and options
What Ally Invest lacks
There's a lot for active traders to love about Ally, from its rock-bottom cost structure to its amazing options charting and research tools. However, if you're just a casual investor who has no intention of placing more than a few trades each year – or more importantly, if you're the buy-and-hold type who is biased toward mutual funds and ETFS – you may want to pass on Ally.
Ally offers zero commission-free ETFs or mutual funds. That's hard to fathom seeing as thousands of traditional mutual funds come standard on most platforms, and nearly every other broker has made a not to exchange traded funds in some way. However, remember that many of these folks come from the funds biz to begin with, and that simply isn't Ally's background or focus.
Another shortfall is the lack of third-party research that is easy to access on other platforms. Again, that's because many of these shops are doing investment research for internal use or they have been around long enough to get connected with the big guys. But Ally is just getting started in the space and seems to be committed to the do-it-yourself active investor instead of a traditional investor with a focus on funds and price targets from the big name firms.
Ally Invest is best for...
Ally is very much suited for the next generation of active investors who are native to digital banking and comfortable doing their own research. There are 21st-century spins on some of the more traditional offerings, including online savings offerings and even managed accounts. But this is not the core mission or the key value proposition of Ally.
A look at this online broker shows that it is fighting to win the hearts of active traders who are serious about stocks and options but don't want to pay the higher fees of traditional brokerages and don't care if they lose access to mutual funds in the process.
If you're at all comfortable managing your own money, Ally grows with you, too. That makes it worth funding an account for anyone who is serious about stocks and options.
