Update May 2017: TradeKing is now Ally Invest
A growing percentage of investors are using technology to manage investing online. I recently took a look at Ally Invest.
This site promotes itself as a low-cost vehicle to trade a variety of securities (stocks, bond, mutual funds, etc.). The site also advertises the variety of research and trading tools that are on the platform.
I decided to look at the fees and costs for the site, then review most of the tabs listed at the top of the home page. I’ve listed the pros and cons of Ally Invest at the end of this review, as well as any current promo codes that may be available.
Fees and Costs
Ally Invest promotes a $4.95 cost per trade. The site also charges 65 cents per option contract traded and $1 per bond ($10 minimum). Their promotional material compares their fees with several large online trading competitors. After comparing Ally Invest with other sites, I found that their trading costs are very competitive. If you want to compare for yourself, you can check out every online broker on our Online Stock Brokerage Comparison Tool.
Given their low costs, I was somewhat concerned that Ally Invest’s trading revenue would not be sufficient to support the infrastructure needed to service their customers.
I checked out the other fees associated with a Ally Invest account. There is no minimum account size, which I thought was helpful to investors just starting out. The fees for retirement accounts and other services are also reasonable.
Opening An Account At Ally Invest
Ally Invest has an “Open An Account” button on every page of the website that I reviewed before opening an account – smart marketing on their part. I thought the process of opening an account was simple, with a few exceptions.
The account application asks for your Social Security number. Ally Invest has a lock icon next to that line on the application. They point out the IT security they use to protect personal information. That feature gave me a better comfort level about entering my social security number.
The investing experience section of the application was confusing. The app asks for your experience with stock, bonds and option trading. There is not a “no experience” choice for this section. Instead, the app has levels of experience, such as “less than $5,000 invested”, or “less than 10 trades per year”. I think a choice for no experience would have been helpful. I do realize that these are required questions, but I've seen them done better elsewhere.
I received an email once my account application was submitted. The email mentioned the Trader Network online community. I thought that was helpful, particularly for someone who is new to online investing.
My application was approved within 5 minutes. I received another email, which explained the choices I had to fund my account.
Logging In And Funding My Account
Ally Invest clearly displays a SignIn area in the upper right portion of the home page. When I first logged into my account after approval, I was prompted to set up three security questions and answers. I also was asked to select an image for account security. This step only took a few minutes to complete.
Once I logged in, the screen displayed four choices for funding my account. The screen was visually appealing, with blue text on a gray background. I clicked on “No thanks, I’ll fund later” and moved on the dashboard itself. This funding option comes up each time you log in until you fund the account.
My Accounts Tab
Ally Invest lists 7 tabs across the top of the home page. If you move the cursor over the tab, you see all of the components of the drop down menu. I thought that feature made website navigation much faster.
The My Account tab has 11 blue buttons across the top. Each button is a drop down menu. While all of the information in the drop down menus is necessary, I thought 11 buttons made the dashboard too crowded.
Ally Invest provides a separate drop down menus for both realized and unrealized gains and losses. I thought those topics could be combined into one menu. In many cases, an investor has both realized and unrealized gains for one specific security. If I owed IBM common stock, it would be nice to click on one menu to see the dollar amount of the IBM gains that are realized- and what my current unrealized gains are for that security.
I also thought that the Holdings menu could be combined with the Options View menu. That would allow me to view both my security holdings and open option positions through one menu.
When you click on each tab of the dashboard, Ally Invest lists helpful articles. These articles provide more detail on topics presented on that particular page. On the Balances page for example, you see a listing of all securities held- including short positions sold using a margin account. To the right Ally Invest provides an article on “Stocks requiring higher margin” The article links can save the investor time.
Ally Invest Account Summary Page
Ally Invest’s Account Summary page is easy to use. The top center section of the page gave me links to find my account, or transfer my account from another brokerage firm.
I liked the fact that the summary page allows you to enter a stock quote a get a current price. You don’t need to go to another screen to check on a stock price. If you have open orders (trades that have been submitted but not filled), you can also get that information on the summary page.
The summary page format allowed me to view current cash balances, security holdings and the ability to transfer funds in the same section of the screen. I think this format allows an investor to get a nice overview of their account.
Balances, Gains and Losses Screens
The Balances screen has a great layout. The securities section lists both long and short positions for stocks and option position. Since short positions generally involve more risk, I like the fact the information is separately displayed.
The bottom of the securities screen computes the maximum funds that are available to trade. That number is helpful.
The Realized and Unrealized Gains screens are critical. Those totals help the investor understand the tax impact of their investing. I do think the two gain and loss tabs on the dashboard could be combined into one page.
Tax Lot Allocation
One of the most difficult tasks for an investor is keeping track of the cost basis for security purchases. The Tax Lot Allocation screen allows investors to match a sale lot (number of share sold and price, as of a certain date) with a specific purchase. This screen allows Ally Invest to compute realized gains and losses. This feature is very useful.
Trading Tab
If you go back to the home screen, you’ll see the Trading tab is underneath the main Invest tab. The Trading drop down menu offers access to trade stocks, bonds, mutual funds and options.
In the Bonds section, Ally Invest offers a Build A Ladder tool. Laddering maturities refers to a portfolio of bonds that mature over time. By laddering maturities, you’ve able to invest dollars in new bonds over time. The ability to reinvest some of your portfolio reduces the impact of changes in interest rates on a bond portfolio. As rates move, you’re reinvesting some of your dollars at current rates. This is a great tool to reduce interest rate risk.
Options Tab
I also looked the choices available on the Options portion of the Trading drop down menu. Ally Invest provides tools to analyze and set up a variety of options trades. An investor can set up spreads, straddles, covered call and protective puts. In each case, your prompted to enter the stock’s ticker symbol, then input other data to set up the trade. I thought the screen here were clear and straightforward.
Quotes and Research
To use research tools, I went back to the home screen. Research and tools is the fifth tab from the left. When I clicked on the tab, it scrolled my screen down to show 6 sections.
Markets
The US Markets page provides a nice overview. In particular, I liked the Market Data section of the page. An investor can view stocks categorized by most active (shares traded), largest percentage gain or loss for the day, or by largest dollar amount change in stock price. I thought the Market Movers section was eye-catching.
Alerts Center
One difficult task for an individual investor is staying informed. Technology provides an overwhelming amount of information. An investor needs specific, timely information on securities that they own.
The Ally Invest alert feature lets you set up alerts for specific securities, or for the broad market. If you own IBM common stock, for example, you can set up a variety of alerts for IBM. You many want any news regarding IBM, or an alert for a large movement in the stock’s price.
You can also set up alerts for the broader markets. For example, you may want to know the stocks with the largest percentage gains and losses on a particular exchange. Your alert can notify you of stocks with the largest trading volume for the day. These tools help you to make informed decisions.
Calculators
Many investors perform “what-if” calculations. On a basic level, you may want to know the gain or loss on a particular stock position before you place a trade. Ally Invest offers that tool in the Calculations section.
This area of the site provides several tools for advanced analysis. The Probability Calculator uses implied volatility and standard deviation to assess a target price for a stock. You also have access to an Options Pricing Calculator.
Education
If you choose to invest on your own, you need tools to continually educate yourself. You’ll find an Education tab at the top of the home page. As expected, I found education topics listed by security type (stocks, bonds, mutual funds, etc.).
The Pros of Ally Invest
Ally Invest has a number of great features. Here are the ones that I thought were most important:
- Low-cost trades, no minimum account size
- The Balance, Gain and Loss and Tax Lot Allocation screens are very useful
- Ladder Maturities tool
- Alerts Center
The Cons of Ally Invest
Ally Invest also had a few drawbacks:
- Revenue, site viability: In spite of the positive reviews, I still wonder if the site’s low revenue per trade will be enough to support the site’s infrastructure. So far, not a problem
- Investment application: Some sections of the application were not clear
- My Account page layout: I thought this section of the site had too many buttons with drop down menus. It was too crowded and created a distraction
My Recommendation
In spite of some drawbacks, I would recommend Ally Invest. Overall, the site is very user-friendly. The ease of use, along with low costs, make Ally Invest attractive to investors. As a result, I give Ally Invest 3 out of 5 stars.
If you're thinking about Ally Invest, sign up here and take advantage of the current promotions.
What are your thoughts on Ally Invest? Share your experience below!
If you want to know about other brokers, check out our Online Broker Comparison Tool.
Ally Invest
Pros
- Low Commissions
- No Account Minimum
- Ladder Maturities Tool
Cons
- Higher Costs Compared To Other Services
- Layout And Design
Want To Learn How To Invest?
Join 10,000 others who've taken our FREE video training program to learn how to get started investing today!
Avoid Ally at all costs. I wired money in to activate an old Tradeking account on a Monday for the purpose of autotrading various strategies offered on the Collective2 website who listed them as a compatible broker. Turns out they are not compatible, and apparently very proud of the fact that they don’t support any third party applications. When I sent in a wire request form to have my money returned, I was told there is a 60 day hold (!!!) and no money would be returned until that time had elapsed. So they are somehow legally allowed to hold customer funds for as long as 60 days for no reason whatsoever … and the rudeness of the person I spoke with about this was just unbelievable. Stay away from this company!!