Ally Invest Managed Portfolios is FREE!
Best known as one of the top online banking platforms, Ally Bank acquired TradeKing in 2016, forming Ally Invest. The new division serves as Ally’s investment arm, offering a robo-advisor platform along with self-directed investing that includes stocks, bonds, mutual funds, ETFs, options, Forex and futures.
The TradeKing robo-advisor was restructured into Ally Invest Cash-Enhanced Managed Portfolios (originally named Ally Invest Advisors). But Ally Managed Portfolios isn’t simply TradeKing Advisors renamed.
Ally Invest Managed Portfolios has revamped nearly every corner of the original platform, essentially creating a new robo-advisor.
Ally Invest Cash-Enhanced Managed Portfolios Review
Name: Ally Invest
Description: Free robo-advisory investment manager with access to stock trading and more financial services through Ally Bank.
Ease of Use
Tool & Resources
- Investors seeking one home for all money matters – banking, managed investing and self-directed trading.
- Beginning investors seeking low fee investment management.
- Retirees seeking income portfolio.
- Superb diversified fund choices, including SRI
- Conservative income portfolios available
- Zero management fee and low minimum investment amount
- To get free investment management you must agree to a 30% cash allocation.
- No dedicated managed portfolios app.
Ally Managed Portfolio Review (Formerly Ally Invest Managed Portfolio) Latest News:
- ZERO account management fees!
- Minimum investment amount lowered to $100
- Tax optimized offering available
- Socially responsible investments
Ally Invest Managed Portfolios Robo-advisor Features at a Glance
|Overview||Automated investment management robo-advisor platform|
|Minimum Investment Amount||$100|
|Fee Structure||Zero aum management fees for all portfolios with a minimum of 30% cash assets. Management fee is .30% for portfolios with less than 30% cash.|
|Top Features||Goal-based robo-advisor with access to Ally Bank and Ally Invest, two of the very best platforms in their respective fields. Plus extensive diversification with ETFs. SRI portfolios and Tax-optimization portfolios too.|
|Contact & Investing Advice||7am - 10pm EST - 7 days per week by phone or email any time.|
|Investment Funds||Low-cost index stock and bond ETFs. Includes diversified market cap stock and global and mortgage backed bond funds.|
|Accounts Available||Individual and joint taxable accounts; traditional, Roth and rollover IRAs; custodial accounts.|
|Promotions and website||Visit Ally.
None for the robo-advisor. Self directed investors have promotions at Ally Invest.Visit Ally. None for the robo-advisor. Self directed investors have promotions at Ally Invest.
What is an Ally Managed Portfolio?
So, you may be wondering “How do Managed Portfolios Work?”
Before we get into the Ally Cash-Enhanced Managed Porfolios Robo-Advisor Review, it’s helpful to understand managed portfolios.
An investment portfolio is simply the stocks, bonds, mutual and exchange traded funds that you own. If you select these financial assets on your own, then you are managing your own portfolio.
Yet, if you prefer to have your investments selected and managed for you, then Ally Managed Porfolios will take care of everything.
“When you work with us, you’ll get a tailored investment approach carefully monitored by a team of specialists – all for a low, affordable fee that never changes,” ~Ally website
Read this Ally robo-advisor review and learn all about how managed portfolios work, and who Ally Invest Managed Portfolios is best for.
What Differentiates Ally Invest Cash-Enhanced Managed Portfolios Robo-Advisor From Competitors
Ally Invest Managed Portfolios is distinct in its investment fund offerings. The Ally robo-advisor offers excellent diversification with just nine funds. We like the addition of three market cap stock funds; large, medium and small cap ETFs. Additionally, their bond ETF offerings are outstanding with access to mortgage backed bonds and a global bond ETF in addition to the typical fixed funds.
Ally Invest Managed Portfolios now offers tax-optimized portfolios. This is beneficial for taxable accounts and may reduce taxes and maximize returns.
Further, Ally Invest Cash-Enhanced Managed Portfolios departs from standalone robo-advisors in its inclusion as part of the Ally family, which has become one of the most diversified financial services platforms on the internet. This places Ally Invest Managed Portfolios in a similar camp with Schwab Intelligent Portfolios and Fidelity Go.
Ally offers an entire suite of financial services:
- Ally Invest. Ally Invest is a do-it-yourself investment platform, enabling you nearly unlimited investment options. They also offer one of the lowest trading commissions in the industry, at $4.95 per trade for stocks, ETFs and options. If you are a high-volume trader, the commission drops to $3.95 per trade.
- Ally Bank. The Bank offers some of the very highest interest rates for online savings accounts and certificates of deposit. They even offer an interest-bearing checking account – with an ATM card – which is uncommon among online banks. The Bank is frequently cited as one of the best alternatives to brick-and-mortar banks. Ally Bank earned a “Best Online Bank” ranking from Money Magazine in 2018.
- Ally Bank also makes loans. They offer a Visa card through TD Bank and provide home mortgages. But on the lending side, their specialty is auto loans. As the successor to General Motors Acceptance Corporation (GMAC), Ally Bank offers a wide range of both loans and leases. One of the most innovative is their Ally Pre-Owned SmartLease program that enables you to lease used cars.
If you’re seeking a one-stop financial management portal with managed account access and a best banking and trading services, Ally should be considered.
Who Benefits from the Ally Invest Cash-Enhanced Managed Portfolios (formerly Ally Invest Managed Portfolios) Robo-Advisor?
If you’re wondering, “Who should consider Ally Managed Portfolios,” here’s your answer.
Ally Invest Managed Portfolios is an excellent choice for any investor who lacks either the experience or the motivation to manage their own investments. It gives you the ability to have professional investment management at a fraction of the cost for traditional human investment managers.
If you are willing to hold a 30% cash allotment in your portfolio, invested in a high yield cash account, then there are zero account management fees.
For those who prefer a lower cash allocaiton the advisory fee is 0.30%. This means that a $100,000 portfolio can be professionally managed for zero management fees with a 30% cash allocation or just $300 per year with a lower or no cash allotment. This is in the low- to mid-range of the robo-advisor fee spectrum.
And beyond the robo-advisor service itself, working with Ally gives you direct access to Ally Invest for self-directed investing, or Ally Bank, for both high interest savings accounts and innovative loan programs.
We love the seven day per week (7am to 10pm EST) customer service! Who hasn’t been frustrated at limited customer service hours while looking at a financial account late at night or on a week-end?
So, if you want a one stop shop for both managed robo-advisor investing and access to DIY investment tools, you need to study this Ally robo-advisor review.
Is Ally Invest good for beginners?
The Ally Invest Managed Portfolios is ideal for beginning investors. You can start by using the managed Ally invest robo-advisor to oversee your investments.
As you become more experienced, you can try your hand at investing on your own with the Ally Invest stock, bond and fund investment options-now offering up to $3,000 bonus.
Just be aware that for robo investing, there are other platforms with zero or low management fees such as M1 Finance, Schwab, Betterment and Wealthfront that don’t require a 30% cash allocation.
Ally Invest Cash-Enhanced Managed Portfolios (formerly Ally Invest Managed Portfolios) Robo-Advisor Features
Ally Invest Cash-Enhanced Managed Portfolios provides a professionally managed, fully automated investment service. Your portfolio is based on your specific needs, risk tolerance, investment goals and time horizon. Portfolios are constructed from a number of diversified low-cost index funds.
You also have the ability to influence your asset allocation. You can do this by making changes in your investor profile at any time or adjusting the risk vs. return slider. As is the case with most robo-advisors, you cannot place any trades within your account.
Your asset allocation is the percent invested in stock funds vs. bond funds and other investments.
Ally joins Schwab Intelligent Portfolios in a commitment to a cash allocation. To benefit from the zero fee option, your investment portfolio will own 30% cash assets. Although Schwab’s cash allocation is typically under 10%.
A cash position is seen as a form of diversification and acts as a buffer for rebalancing. Ally supports maintaining a cash position as a stabilizing influence on your portfolio.
The Ally robo-advisor offers five basic investment portfolios, determined by your risk tolerance and time horizon. At sign up (discussed below) you’ll answer a few questions which will guide the recommended portfolio.
Ally managed portfolio choices:
- Conservative – Very low risk tolerance
- Moderate – Low risk tolerance
- Moderate Growth – Moderate risk tolerance
- Growth – High risk tolerance
- Aggressive Growth – Very high risk tolerance
The portfolios are suitable for all types of investors from the most risk-averse, conservative folks to those who are willing to withstand some added volatility while pursuing higher returns.
The most conservative – Income Portfolio is designed to preserve your capital and provide income. This option is ideal for retirees or those seeking cash flow from their investments.
Another aspect we like is that you can change your asset allocation at any time, should your needs or risk tolerance change.
As is the case with many robo-advisors, Ally Invest Managed Portfolios uses ETFs from Vanguard and iShares.
The funds are low-fee, liquid (that means that they’re easy to buy and sell), and issued by well-regarded investment companies.
This diversification of funds and asset classes in Ally’s managed portfolios helps to minimize losses should one sector fall out of favor.
Funds are chosen to represent the following asset classes:
- US Stocks
- International Stocks
- US Bonds
- International Bonds
A very low risk portfolio (Conservative) will hold 19% in stocks, and 81% in bonds and cash. A very aggressive portfolio (Aggressive Growth) will hold 93% in stocks, and 7% in bonds and cash.
For those interested in cash flow, the conservative taxable account includes municipal bonds and will offer tax-loss harvesting soon to minimize tax payments.
We like the asset allocation options at Ally.
Of the digital advisors, the Ally robo-advisor offers among the most conservative option for investors with only 19% invested in stock funds. This is great for older retirees and those seeking cash preservation over growth.
Ally Invest Managed Portfolios offers the following funds in their best managed accounts.
- iShares Core S&P 500 ETF (IVV)
- iShares Core S&P Midcap ETF (IJH)
- iShares Core S&P Small-Cap ETF (IJR)
- Vanguard FTSE Developed Markets ETF (VEA)
- Vanguard FTSE Emerging Markets ETF (VWO)
- iShares 7-10 Year Treasury Bond ETF (IEF)
- iShares Intermediate Credit Bond ETF (IGIB)
- Vanguard Mortgage-Backed Securities ETF (VMBS)
- iShares National Muni Bond ETF (MUB)
- Vanguard Total International Bond ETF (BNDX)
Socially Responsible Investing
For investors who want to invest with their values and still grow their wealth, Ally offers socially responsible investment funds. The standard stock invetment funds are replaced with SRI funds like:
SRI US Stock Funds
- iShares ESG MSCI USA ETF (ESGM)
- iShares ESG MSCI USA Small-Cap ETF (ESML)
SRI International Stock Funds
- iShares ESG MSCI EAFE ETF (ESGD)
- iShares ESG MSCI EM ETF (ESGE)
Take a look around the platform and find out your recommended investment portfolio with no sign up obligation.
Automatic rebalancing is key feature of all robo-advisors, including Ally. When your investment mix deviates from your preferred asset allocation percentages, the robo-advisor sells the over-performing assets and buys more of those that have fallen in value.
That will return your investment mix to the one you originally selected.
What are the Ally Invest Managed Portfolio Fees?
The advisory fee is zero as long as you hold a 30% cash allocation. If you prefer fewer cash assets, then the fee is .30% of assets under management and is charged within the first 10 days of the month for the previous month. There are no trading fees charged for buying and selling asset positions.
As is the case with most exchange traded funds, there is a small management fee that is charged by the specific fund. This fee is generally quite low and less than .10%. This fee doesn’t go to Ally, but to the ETF.
The .30% Ally Invest Managed Portfolios fee is a bit higher than competitors althouh the zero management fee is on par with M1 Finance, Schwab and Axos Invest.
Ally Mobile App
Ally has one general app that enables you to access your accounts with Ally Bank, Ally Invest and Ally Invest Managed Portfolios. There is no mobile app specific to Ally Bank Managed Portfolios.
The app is available for Apple iPhone, iPad, Touch ID and Apple Watch, as well as for Android and Windows Phones. You can make deposits, move money between accounts, pay bills and access cash through your Ally Bank account.
Are Ally Invest Cash-Enhanced Managed Portfolios Safe?
You can be confident that your investment at Ally is safe and follows all of the legal requirements of financial institutions. Plus, they have additional insurance to cover broker failure.
Clearing agency. Ally Managed Portfolios are offered by Ally Invest Securities, LLC. Apex Clearing, Inc. clears and settles trades. Both agencies are members of FINRA and SIPIC.
Account protection. Accounts are protected against broker failure by SIPC, which provides coverage of up to $500,000, including $250,000 in cash. Apex Clearing also maintains additional insurance through a group of London underwriters, for up to $37.5 million in aggregate, including up to $900,000 in cash.
Of course, all investments are subject to the market volatility which means that your investment returns will go up and down.
Ally Invest Managed Portfolios Tax Loss Harvesting
Ally robo-advisor offers tax optimized investing for taxable accounts.
“Great for investors in higher tax brackets. If you make after-tax contributions to an investment account or IRA then tax-optimized investing can help maximize your investments.”
Ally Invest Managed Portfolios Robo-Advisor Sign-up Process
The Ally robo signup is easy.
In order to open an account with Ally Invest Managed Portfolios you must:
- Be a citizen or a legal permanent resident of the United States (accounts are not available for nonresident aliens)
- Be at least 18 years old
- Have a Social Security number or, if you’re opening a bank account, your Taxpayer Identification number
- Have a U.S. street address
The sign-up process starts with the “Tell us about yourself” input screens. By answering several questions, you’ll get your portfolio allocation. This is done before you even begin the actual sign up process.
This is an excellent feature, because it gives you a chance to see exactly what the service will do for you before actually committing to using it.
The drop-down menu includes:
- Prepare for retirement
- Save for a major purpose
- Build wealth
- Generate income from my investments
This first question answers the “Why are you investing?” question and drives the sign up process.
The second question is where you select your primary investing goal.
We selected that we want to prepare for retirement with a goal of amassing $1,000,000 for retirement.
The next question delved into our time horizon – how long until we need the money and how much risk we can tolerate. We’re opening this account for retirement savings, decades into the future.
The risk tolerance is a self-report, although if you’re not sure about your risk tolerance, then click on “Learn about each risk tolerance”.
We indicated that we’re long-term investors with a moderate risk tolerance.
Next are questions about our current financial picture and expected investment amounts.
We indicated that we have $50,000 in stocks, bonds and cash or liquid assets.
We’re going to start investing with $3,000.
The final screen before viewing the recommended investment portfolio asks,
What type of managed account are you looking for?
This screen explains the two account choices are Taxable or Retirement Account with detailed descriptions of each type.
We chose a taxable account.
After you choose either Taxable or Retirement Account you’re able to view the recommended investments.
Choose the portfolio type you’re interested in.
Your investments will change depending upon whether you choose:
- Core Portfolio
- Tax Optimized Portfolio
- Socially Responsible Portfolio
We hose a core portfolio.
Given our inputs, Ally Cash-Enhanced Managed Portfolios recommends a high-risk tolerance portfolio with 56% stocks and 14% bonds and 30% cash.
Once this screen appears, you can use the slider on the bottom to adjust the portfolio recommendation. This is a handy feature, to explore alternate asset allocations.
Once you’re satisfied with the allocation presented, you can proceed with the signup process.
The sign-up is a six-screen process:
- Name and email address
- Select account type
- Address, Social Security number, phone number and general information
- Employment information
- Financial information (annual income, net worth, liquid net worth, and tax bracket)
- Beneficiary information
After your account is established, you can fund it by check, wire, or direct transfer from a linked bank account.
Learn more about the Ally Invest Cash-Enhanced Managed Portfolios features.
Ally Managed Portfolio Performance
As would be expected, The Ally robo-advisor returns vary based upon the type of portfolio selected. The conservative portfolios are expected to yield lower returns, with less risk. While over the long term, it’s expected that higher risk portfolios will offer higher returns.
One investing rule of thumb is that with higher risk, you can expect your investment values to jump around more than with conservative portfolios. That means that you will typically experience greater highs and lows in the short term with a more aggressive portfolio.
Below are the historical annual returns for each of the portfolios allong with average and cumulative return data. In the last column you’ll find the standard deviation, which is description of the portfolios price volatility, with higher scores aligned wtih greater price swings.
From 2011 to present the high risk tolerance – core growth portfolio had annual returns of 4.95% with a standard deviation of 6.49%. The large cash allocation, in today’s low interest rate environment will yield lower returns than a similar asset allocation with higher bond exposure.
We appreciate the transparent Ally Managed Portfolio performance data.
We appreciate the transparent return data for each of the five risk adjusted portfolios. Notice that the standard deviation, which measures the portfolios volatility is lower on the conservative investments and higher on the more aggressive portfolios. While the returns are lower on the conservative portfolios and higher on the riskier portfolios.
It’s worth noting, that in comparison with common investing theory, the Ally Invest Managed Portfolios are allocated significantly more conservatively than comparable portfolios with the same risk levels.
For example, the most aggressive portfolio, labeled Very High Risk Tolerance or Agressive Growth has the following asset allocation:
- US Stocks 40%
- International Stocks 26%
- Cash 30%
- International Bonds 1%
- US Bonds 3%
You would expect an aggressive portfolio to be investing in 80% or more stock assets and the remainder in bonds. Ally Invest’s 66% stock market allocation is more akin to a moderate investment portfolio.
Ally Invest Robo-Advisor Pros and Cons
- The diversified ETF selection is superior to some competitors’ more vanilla fund choices.
- The low $100 minimum investment amount makes it easy to get started investing.
- Socially-responsible investing increases the competitiveness of the Ally Managed Portfolios platform.
- If you also have an account with Ally Invest, you can have part of your portfolio professionally managed, while still maintaining a self-directed portfolio.
- The Ally Bank tie-in is tough to beat. Hands down, it’s one of the very best online banks available.
- Seven day per week (7am to 10pm EST) customer service is a welcome bonus.
- The zero management fee is compelling, but the exected lower returns from the required 30% cash position could offset any savings from the lack of a management fee.
- For those investors who opt-out of the free management in exchange for a lower cash allocation, there are lower fee stand-alone robo-advisors with more features. Betterment and Wealthfront charge just 0.25%. Among competing large broker robo-advisors, Charles Schwab Intelligent Portfolios has no management fee at all.
- The Ally Managed Portfolios doesn’t have its own app, but is part of the Ally Invest app.
How Ally Managed Portfolios Compares
Ally Managed Portfolios Robo-Advisor vs. DIY Self-Directed Investing
If you’re an experienced investor and enjoy choosing your stocks, bonds and funds, then investing on your own might be the best path for you. The only fees you pay with investing on your own are small trading commissions and the low underlying ETF fund management fees.
If you prefer the hands-off approach to investing, then let the Ally robo-advisor do the investing for you. You’ll pay a zero or low management fee, but enjoy the comfort that your investments are aligned with your goals, time-line and risk tolerance.
Whichever approach you prefer, Ally offers the tools. You can even have part of your investments in Ally Managed Portfolios and the rest in your own investment brokerage account.
Ally Managed Portfolios vs. Betterment
The Ally Robo-advisor has many similarities and a few distinctions with Betterment
Look at this Ally vs Betterment comparison chart to see how these two robo-advisors match up.
|Betterment||Ally Invest Managed Portfolios|
|Overview||A goals based automated investment advisor. Betterment bills itself as, "Investing Made Better." Offers a variety of human financial planning options.||Automated investment management robo-advisor platform|
|Minimum Investment Amount||There is no minimum investment amount required for Digital. $100,000 required for Premium.||$100|
|Fee Structure||Digital-0.25% AUM up to $2 million.|
Premium-0.40% AUM up to $2 million
Reduced fees above $2 million.
|Zero fees for investment management (with 30% cash allocation). .30% AUM with less than 30% cash. Per service charge for mailed statements, account closure etc.
|Top Features||Goal-based ETF investment portfolio. Rebalancing. Tax-loss harvesting. SRI, smart beta + income portfolios. Human financial advisor access.||Goal-based robo-advisor with access to Ally Bank and Ally Invest, two of the very best platforms in their respective fields. Plus extensive diversification with ETFs. Tax-loss harvesting + income portfolios.|
|Free Services||See promotions.||None|
|Contact & Investing Advice||Phone and email support, 7 days per week.||7am - 10pm EST - 7 days per week by phone or email any time.|
|Investment Funds||Low-cost, commission-free ETFs.||Low-cost index stock and bond ETFs. Includes diversified market cap stock and global and mortgage backed bond funds.|
|Accounts Available||Single + joint taxable brokerage. Roth, traditional, rollover + SEP IRA. Trust.||Individual and joint taxable accounts; traditional, Roth and rollover IRAs; custodial accounts.|
|Promotions and Website||Free management fee promotion in effect (time limited)Free management fee promotion in effect (time limited)||None for the robo-advisor. Self directed investors have promotions at Ally Invest.|
If you’re seeking a free robo-advisor with $100 minimum to a get started, then yes, managed portfolios is worth a look.
Absolutely. Ally Invest is a legitimante digital investment portfolio manager. It is also part of the Ally financial family, known for it’s high yield savings account and other banking services.
Yes, we recommend Ally for beginners. Other beginner investment platforms we recommend are Betterment and Wealthfront. If you would like to have your money managed for free, have access to stock market investing and banking services then Ally Invest is worth a look.
Ally Invest Managed Portfolios Robo-Advisor Review Wrap Up
As a relative newcomer on the robo-advisor scene, Ally Invest Managed Portfolios’ is competitive with other robo’s with broad ETF choices, socially responsible-SRI investing, tax-optimized portfolios and a $100 minimum investment amount.
The opportunity to change your asset allocation at will is useful should your goals change. The slider and historical returns data is great, and quite transparent.
I am perplexed at the requirement to hold 30% cash in order to get free management. I’m an extremely conservative investor and nearing retirement and even I don’t hold that much cash in my investment portfolio. In fact, the requirement to hold a 30% cash postition in order to qualify for free investment management is my only complaint about the platform.
I like the Ally Investent choices. The website is top-notch, easy to navigate with a great user experience. For a taxable account, the cash could be viable if you are an extremely conservative investor. Or, you could opt for less cash and pay the modest .30% management fee.
The most compelling feature of this Ally Invest robo-advisor review is access to the broad suite of Ally products. Ally Bank offers some of the best in online banking services, including very high interest rates on savings products (in fact, the Ally Bank interest rates are superior to most other banks and investment firms) and a full suite of auto loan leasing programs.
Ally Invest Managed Portfolios may be best suited for investors who already work with either Ally Invest or Ally Bank, to take advantage of the crossover services. Alternatively, it will work well for those who want a robo-advisor service, and plan to take advantage of Ally’s other product offerings.
*Disclosure: Please note that this article contains affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.