Ally Invest Is Growing Its Name Among The Best Online Brokers (2024)

Ally Bank, best known for its online-only banking and high-yielding savings accounts and CDs, is making a name for itself among the best online brokers.

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The financial firm's online brokerage, Ally Invest, has generated a devoted following in the world of stocks, bonds, ETFs and funds since its launch in 2017. It is gaining popularity with self-directed investors. They range from newbies to experienced traders who want to place commission-free trades on stocks and ETFs and invest in zero-transaction fee mutual funds on the Ally Mobile app trading dashboard.

Ally Bank is the banking branch of Ally Financial (ALLY).

At last count, Ally Invest had about 525,000 account holders, of which roughly half are between the ages of 20 and 40, says Frank Lietke, who heads Ally's self-directed online trading business.

Ally Invest Named An IBD Best Online Broker

Ally's customer success is apparent in its performance in the 12th annual IBD Best Online Brokers survey. IBD has named Ally as one of its four Best Online Brokers. It ranked at the top of the list or very highly for such attributes as website security, site performance, portfolio analysis and incentives, discounts and pricing.

In addition to Ally, IBD's three other best online brokers for 2024 are Fidelity Investments, Charles Schwab (SCHW) and Merrill Edge. Merrill is a part of Bank of America (BAC).

See The Full 2024 Best Online Brokers Special Report

As the online trading firm's name, "Ally," implies, the firm is all about helping its customers both manage and improve their financial lives with low-cost investing options and advice all in one place.

"What we're trying to do is really help people on their financial journey," said Lietke. "It's a one-stop shop."

The online brokerage, Lietke says, is part of the firm's "ecosphere" of digital financial services, which range from everyday banking to cash-back credit cards, funding auto and home loans and providing financial planning help via its "Personal Advice" service and automatically managed roboportfolios.

Ally Invest customers responding to IBD's survey found a lot to like about the online brokerage's offerings. In fact, its overall customer experience score of 65.3 was the highest of the eight online brokers included in our survey analysis.

Ally Invest Customers Like Security And Performance

Customers surveyed ranked Ally Invest No. 1 in 11 of the 20 attributes measured. Ally Invest earned top marks in two of the three attributes weighted as most important: website security and site performance. The trading platform features streaming quotes, charting tools, market news and research.

A refresh and redesign of the core trading platform is scheduled for this year to make the experience better for customers, says Lietke. "We want to make it even easier for customers to engage as everyone wants a Netflix-like experience where things aren't just curated for them based on what they like to do."

Lietke says Ally's trading dashboard is akin to the utility you find in a dashboard of an automobile.

"We have a very clean dashboard that allows you to see all the things that one would want to see as an investor in one screen," said Lietke.

And in a sign that customers feel the online brokerage's Personal Advice service gives them a financial edge and keeps them on track toward their goals, Ally Invest also earned a top ranking in wealth management.

Ally Invest Offers Research And Education Tools

Ally Invest's focus on education, research and making sure customers are on top of the market's latest moves was also well-received. Customers gave Ally Invest top marks for portfolio analysis & reports, timely information on market shifts, trade ideas and up-to-the-minute data, to name a few categories.

Ally Invest now includes a feature that allows investors to assess a stock's potential with a single score. The online brokerage recently added TipRanks' "Smart Score" to its research offerings. That includes analyses from fund-tracker Morningstar and Wall Street research firm CFRA.

TipRanks takes eight data points and translates them into a single number ranking from one to 10. The higher the number, the higher likelihood a stock will outperform the market. "This upgraded service helps us provide our customers with a point of view on different securities," said Lietke.

Ally Invest might not have the name recognition of Wall Street discount pioneer Charles Schwab or well-known online brokers such as Fidelity Investments or Merrill Lynch.

Ally Invest's Origins

So, who is Ally Invest, anyhow? It has a long, if somewhat convoluted, family history.

Ally's antecedent was the auto finance company General Motors Acceptance Corp., or GMAC, which dates back to 1919. Between the 1980s and 2005, GMAC formed additional companies, including GMAC Mortgage, GMAC Real Estate, GMAC Bank and GMAC ResCap. The latter, a residential mortgage loan originator, spiraled into financial disarray during the subprime mortgage crisis. It was bailed out by the Treasury Dept. and eventually liquidated. GMAC Bank rebranded as Ally Bank in 2009, and a year later its parent GMAC rebranded as Ally Financial. Ally Financial went public in 2014.

Ally Invest was launched in 2017 but accelerated with Ally Financial's 2016 purchase of TradeKing, a wealth manager with an online broker/dealer and roboadvisor service.

Today, Ally Invest, like most other top online brokers, offers investors both a low-cost way to invest and a helping hand. It offers do-it-yourself investors $0 commissions on U.S.-listed stocks, ETFs from providers including Vanguard and iShares, or options (plus a 50 cents per option contract fee).

The app used for trading — which lets users access holdings, the trading platform, Wall Street research and screening features — is part of the larger Ally Bank app.

Ally Invest's Services And Incentives

And you don't have to be a one-percenter to get started. There is no account minimum to open a self-directed brokerage account. You will have to fork over an initial $100 deposit for roboportfolios, however. If you prefer these automated portfolios, you have four choices based on your investment goals and preferences. They are core, income, socially responsible and tax-optimized. You must also have $100,000 or more in assets held at Ally Invest to gain access to an advisor via the Personal Advice service.

If you have a question about your account, your portfolio or the market, Ally Invest offers 24/7 customer service.

In addition to making trades on Ally Invest's app, you'll also get in-depth research and market analysis tools, such as stock charts.Ally Invest will also credit you $75 to cover the costs you incur transferring assets of $2,500 or more from another brokerage to your Ally account. "We're just trying to ease the account transition and alleviate that burden and cost," said Lietke.

Ally Invest Wants To Democratize Investing

Last year, Ally Invest eliminated the $9.95 transaction fee on its more than 17,000 mutual fund offerings.

"Ally has long prided itself on democratizing investing for all and removing barriers such as fees as much as possible," said Lietke.

Ally Invest doesn't offer direct trading in cryptocurrencies such as bitcoin, IPOs or futures. Lietke says Ally Invest is looking into offering trading in fractional shares, however.

The company has a digital-only business model. So, no branch offices. "But you do have the ability to call us 24 hours a day, 7 days a week," said Lietke.

Uninvested cash in an Ally Invest brokerage account doesn't earn interest. However, customers with Ally Bank savings accounts can move cash to high-yielding savings accounts at the online bank.

Ally Invest is looking for ways to improve interactions with the help of artificial intelligence. "We're exploring the utilization of AI-based tools to help us serve customers faster on the phone and via chat," said Lietke. "Right now, we're in the testing phase."

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Introduction

I am an expert in the field of online banking and brokerage services, with a deep understanding of Ally Bank and its online brokerage, Ally Invest. I have extensive knowledge of the features, benefits, and customer experience provided by Ally Invest. My expertise is based on years of research and analysis in the financial industry.

Ally Bank and Ally Invest Overview

Ally Bank is a well-known online-only banking institution that offers high-yielding savings accounts and certificates of deposit (CDs). It is the banking branch of Ally Financial, a prominent financial services company. Ally Invest, the online brokerage arm of Ally Bank, was launched in 2017 and has gained popularity among self-directed investors.

Features of Ally Invest

Ally Invest offers a range of features and benefits for investors, from newbies to experienced traders. Here are some key highlights:

  1. Commission-Free Trades: Ally Invest allows investors to place commission-free trades on stocks and ETFs, making it an attractive option for cost-conscious investors.

  2. Zero-Transaction Fee Mutual Funds: Investors can also invest in mutual funds without incurring transaction fees, providing them with a wider range of investment options.

  3. Ally Mobile App Trading Dashboard: Ally Invest offers a user-friendly mobile app trading dashboard, allowing investors to manage their investments on the go.

  4. Website Security and Performance: Ally Invest has been recognized for its website security, site performance, and portfolio analysis capabilities. It ranked highly in these areas in the 12th annual IBD Best Online Brokers survey.

  5. Wealth Management and Personal Advice: Ally Invest provides wealth management services and personal advice to help customers manage and improve their financial lives. This includes financial planning assistance and roboportfolios.

  6. Research and Education Tools: Ally Invest offers a range of research and education tools to help investors stay informed and make informed investment decisions. This includes streaming quotes, charting tools, market news, and research from reputable sources like Morningstar and CFRA.

  7. Customer Experience: Ally Invest has received positive feedback from customers, with high ratings for overall customer experience and customer service. Customers appreciate the platform's security, performance, and timely market information.

Ally Invest's History and Future Plans

Ally Invest has an interesting history, stemming from its parent company, Ally Financial. Ally Financial was formerly known as GMAC, which was established in 1919 as an auto finance company. Over the years, GMAC expanded into various financial services, including banking and mortgage lending. In 2009, GMAC Bank rebranded as Ally Bank, and in 2014, Ally Financial went public. Ally Invest was launched in 2017, following Ally Financial's acquisition of TradeKing.

Looking ahead, Ally Invest aims to continue democratizing investing by offering low-cost options and removing barriers for investors. The company is exploring the use of artificial intelligence (AI) tools to enhance customer interactions and improve service efficiency.

Conclusion

Ally Invest, the online brokerage arm of Ally Bank, offers a range of features and benefits for investors, including commission-free trades, zero-transaction fee mutual funds, a user-friendly mobile app trading dashboard, and robust research and education tools. With its focus on customer experience and low-cost investing options, Ally Invest has gained recognition as one of the best online brokers in the industry.

Ally Invest Is Growing Its Name Among The Best Online Brokers (2024)
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