Ally Invest Review: A Low-Cost Online Brokerage

Ally Invest (formerly known as TradeKing) is a low-cost online brokerage that has an excellent platform and great overall service.

Going with an online brokerage firm to build your after-tax investment portfolio is critical for achieving financial independence. Your goal should be to not only max out your 401(k) and IRA, but to build as large of an after-tax investment portfolio as possible to spit out as large of a passive income stream as possible.

It is your passive income stream from dividend stocks, bonds, real estate, and so forth that will allow you to retire early. You can't touch your 401(k) and IRA without penalty until 59.5.

As someone who started investing online since 1995 and who also worked for a major Wall Street firm in the equities department from 1999 – 2012, here's a comprehensive overview of the services Ally Invest provides.

Financial Samurai has been around since 2009 and is the premier personal finance website today with over 1 million organic pageviews a month.

Ally Invest Overview

Ally Invest has been in business since 2005 and merged with Zecco in 2012 to broaden their brokerage offerings. They’re well-known for their social media presence and low-priced stock trades.

TradeKing was acquired by Ally in early 2016, and since then, Ally has continued to improve on their product offering and user experience. Ally Invest is one of my top picks for best Robinhood alternatives.

Key Features

Trading Platform:The Ally Invest platform is intuitive and relatively simple to master. They offer a $4.95 commission on stock trades and $.65 per contract on options (in addition to the stock commission) which is difficult to beat. This makes Ally Invest one of the lowest priced online brokerages on the market.

Free Streaming Quotes: After placing a trade you can contact them to enable free streaming quotes on your account. This is nice to have if you like to watch the market and are an active trader.

Forex Trading: Just as with Etrade, Ally Invest offers forex trading due to their merger with Zecco. If you’re new to forex, Ally offers a $50,000 virtual account to help you get your feet wet. Nobody should just jump into forex trading, therefore, this feature is excellent for newbies.

Ally Invest Advisors Program: The goal of Ally Invest Advisors is very similar to digital wealth advisors. They act as a low-cost advisor to management your retirement portfolio for a fee.

With Ally Invest Advisors you can start with portfolios as low as $5,000 in low-cost ETFs. These portfolios are based on your specific goals, needs and circumstances. The Ally Invest Advisors program is free of charge for the first year when you open a new account.

The Benefits Of Ally Invest

Ally Invest Review: A Low-Cost Online Brokerage

Low Pricing: Stock trading is now free!

Most readers on Financial Samurai have well over $100,000 in their after-tax investment portfolio, making Ally Invest even more attractive.

Wide Variety Of Mutual Funds: If you like to invest in mutual funds, you’ll enjoy Ally Invest's offering of over 8,000 mutual funds from a variety of fund families. Only the more expensive online brokerage accounts like Charles Schwab have a similar or greater amount. But you really only need at most 10 mutual funds in your portfolio for diversification purposes.

Solid Customer Service: They are there for you between 7 am – 10 pm EST, 7 days a week. Every time I’ve dealt with Ally Invest I’ve been satisfied with my experience. They’re also been consistently honored by Smart Money magazine as one of the top brokers in the industry for customer service. If you like low-cost, but also Apple store type service, Ally Invest is a good fit.

Free Online Support: One thing that sets Ally Invest apart is their use of social media and forums on their site. They take to heart offering real-time support to their clients and think outside the box to do so. They also provide free classes and webinars for new investors, or those new to the platform.

No Minimum to Open: Ally Invest does not have a minimum opening balance requirement. For those who are getting their feet wet with online investing, it's great that you can start with $100 and start trading. When investing, it's always good to start small and work your way up.

Commission-free ETFs: Ally Invest now offers over 500 commission-free ETFs! This is a huge offering as they had zero commission-free ETFs a couple years ago, and less than a hundred commission-free ETFs a year ago.

Main Negative

Non-Activity Fee: Surprisingly, if you have not made a commissionable stock trade in 12 months and/or your account value is under $2,500, Ally Invest will charge you $50 a year.

For 99% of users, this should be no problem because everybody should consider rebalancing at least once or twice a year. If you're not rebalancing at least once or twice a year, your asset allocation could far surpass your original objectives.

Even if you don't rebalance once a year for $4.95, the vast majority of investors will have way more than $2,500 with Ally Invest.

Final Verdict

Ally Invest offers excellent service, a great user interface, and very competitive pricing. The online brokerage continue to improve their product offerings and user interface in a very competitive online brokerage environment.

With the addition of the Ally Invest Advisors platform, Ally Invest is evolving into a full-service online brokerage to help you manage your money better. Whether you are a do it yourself investor or need help, Ally Invest is positioning to be there for you.

All new accounts will receive 90 days of free trades, up to $500 in value. Further, you get $50 – $3,500 cash back, depending on how much you deposit.

Before you make any investment, make sure you understand what you are investing in, have stated financial objectives, and are focused on the long term.

Too many people hurt their returns by trading in and out of stocks too much. The key to great wealth is to buy and hold for the long term. Focus on buying low-cost index funds and ETFs. A proper asset allocation is the way to go.

Sign up here.

Related post: Better To Invest In Growth Stocks Over Dividend Stocks

Scroll to Top