Ally Invest Review
Ally Invest provides discretionary advisor and investment management services to clients. We review how it works and what to expect from the company.
Ally is a firm based in Detroit, Michigan that provides financial services and banking to a wide range of clients. Its subsidiary, Ally Invest Advisors Inc. is a registered investment advisor (RIA) with the SEC. It offers advisor services and investment management to clients in exchange for a wrap fee through its product, Ally Invest.
In this article, we’ll review the services you can expect from Ally Invest. This includes the types of clients it serves, how it works, and its fee structure. We’ll also break down the firm’s disclosure history and list its contact methods. Finally, you’ll get answers to frequently asked questions about the company and its advisor product.
Assets Under Management
$196 billion as of October 2023
Jeffery J. Brown
Ally Invest, P.O. Box 30248, Charlotte, NC 28230
Pros and Cons of Ally Invest
- Offers robo-advisor tools
- Several model portfolios to choose from
- Low fees
- No disclosures
- Must invest at least $100,000 to get a dedicated advisor
- No non-discretionary services
Types of Clients
Ally Invest primarily serves individuals of both high and average net worth. However, according to its Wrap Fee Program Brochure, it will occasionally provide services to “trusts, corporations, and other business entities, provided their investment guidelines permit [it] to do so.” For individuals, you must meet the firm’s account minimums to enroll, which differ based on the service you choose:
|$100,000 per household
Keep in mind that, for the advisory relationship between you and Ally to continue, you must maintain the account minimums above. If you don’t, the firm may opt to terminate your account.
Financial Advisor Services
Ally Invest specializes in providing discretionary investment management and advisor services to its clients. Its services are split into three tiers – Robo Portfolios, Personal Advice, and Guided Advice. Each comes with varying levels of benefits and services that correspond with the minimum investment to open an account. All three are wrap fee programs, which means that the firm packages advisory costs and additional costs, such as trading fees, into one fee.
Below is a detailed overview of what each tier offers and how they work:
Robo Portfolios is an online-only discretionary portfolio management service. After you provide information regarding your goals, risk tolerance, and time horizon, the firm will recommend portfolios to you. These are largely made up of exchange-traded funds (ETFs), which help you diversify your portfolio while also adhering to your goals. According to the firm’s Wrap Fee Brochure, these ETF portfolios are primarily designed for “long-term (i.e., one year or more) investing.”
Before Ally Invest makes any recommendations, you’ll need to choose between a Cash-Enhanced or Market-Focused portfolio. The former comes with no advisory fee, whereas the latter does. It also allows you to choose between one of four portfolio models:
- Core. This model emphasizes diversification across domestic and international equity and fixed-income ETFs. According to your risk tolerance, the approach can scale from:
- Moderate Growth
- Aggressive Growth.
- Socially Responsible. Much like the last model, this will invest in domestic and international equity and fixed-income securities. However, this one focuses on investing in firms that have “positive environmental, social, and governance characteristics,” or ESG.
- Tax-Optimized. This model prioritizes ETFs with “municipal bond exposure” to increase your after-tax returns.
- Income. This model seeks securities that can assist you with providing retirement income. In general, it’s a relatively conservative approach compared to some of the above models.
This is a discretionary service that provides you access to a dedicated financial advisor. After you meet the $100,000 minimum investment requirement, you’ll sit down with an expert, and they’ll work with you to develop a comprehensive financial plan. This is based on your goals, assets, risk tolerance, and time horizon. Beyond just your investments, they’ll help you plan for what you want to achieve or manage, such as:
- Building an estate
- Paying for a child’s education
Once your financial advisor understands your goals and current financial situation, they’ll provide a long-term investment strategy made up of ETFs that fit a variety of asset classes. In general, these are the portfolio models you’ll get to choose from:
- Foundational. This approach focuses on investing in stocks and bonds, while also providing diversification and income.
- Impact. This aims to create an asset allocation that focuses on highly impactful ETFs. For instance, ESG securities fit this mold.
- Thematic. This creates an asset allocation made up of ETFs that focus on specific industries or technologies.
This is an experimental discretionary investment management service that assists clients with a “single investment goal.” Like the other two tiers, Ally Invest will seek to understand your goals, risk tolerance, and time horizon. Then, the firm proposes a portfolio from the Foundational approach that’s also available to Personal Advice clients.
Fee Structure and Cost
Ally Invest charges an advisory fee based on a percentage of assets under management (AUM). Additionally, the more assets you have, the less the percentage will be. However, the amount you pay also depends on the service you choose.
Here’s what you can expect to pay for each service:
|0.30% (no fee for Cash-Enhanced Robo Portfolio)
|0.85% for the first $250,000, 0.80% for the next $750,000, and 0.75% for an extra $1,000,000
Ally Invest Investment Philosophy
As a client of Ally Invest, you can reasonably expect the firm to tailor its advisor and investment management services around your goals, time horizon, and risk tolerance. Once the firm understands these characteristics, it will be able to match you with an approach that corresponds with your risk appetite, as well as recommend several model portfolios for you to choose from.
Keep in mind that Ally Invest’s portfolio recommendations are built for the long haul. They also mainly comprise low-cost ETFs. These focus on managing risk and reward by diversifying your portfolio.
Ally Invest Advisors Inc. is registered with the U.S. Securities and Exchange Commission (SEC) as an investment advisor. As a result, it must make its disciplinary and regulatory history available to the public on its Form ADV filing.
As of this article’s writing, Ally has not received any sanctions or disciplinary actions from the SEC or state regulatory agencies, nor has any of its advisory affiliates or leadership employees, according to the company’s client-facing brochure.
The quickest way to reach Ally’s customer support or learn more about its services is to visit the company’s “Contact Us” page. On it, you’ll be able to find up-to-date phone numbers, contact emails, and mailing addresses for each of the firm’s products.
How to Start an Account
To open an account with Ally Invest, you’ll first need to visit the firm’s website. From there, click “Get Started” and choose Robo Portfolios or Personal Advice. For Robo-Portfolios, you’ll be able to get started immediately. The latter, however, requires you to schedule a call to begin.
This review is based on publicly available information directly from Ally’s website and the SEC. Neither the firm nor its representatives have any say on what we’ve included on this page.
Frequently Asked Questions
Is Ally Invest a fiduciary?
Is Ally Invest good?
Ally Invest may be a worthwhile option if you’re looking for discretionary investment management. If you’re able to meet its account minimums, you’ll gain access to a dedicated advisor to help with financial planning as well. With this in mind, the firm isn’t necessarily as geared toward beginners as others due to its steep requirements.
If you’re looking for a robo-advisor service, it’s a solid option. It offers several model portfolios to choose from, as well as a Cash-Enhanced option that doesn’t charge an advisory fee.
How much money do you need for Ally Invest?
You’ll need at least $100 to invest in Ally Invest’s Robo-Portfolios. To gain access to a dedicated financial advisor with Personal Advice, you’ll need to invest at least $100,000 to get started.
How does Ally Invest make money?
Ally Invest makes money by charging a wrap fee for its services. This is a cost that includes both an advisory fee, as well as other expenses like transaction fees. The advisory fee is based on a percentage of your AUM.
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