Ally Invest Managed Portfolios Review – Returns, Funds + More
Ally Invest Managed Portfolios Expert Review
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 Managed Portfolios (originally named Ally Invest Advisors). But Ally Invest Managed Portfolios isn’t simply TradeKing Advisors renamed. Ally Invest has revamped nearly every corner of the original platform, essentially creating a new robo-advisor.
Ally Invest Managed Portfolios Robo-advisor Features at a Glance
|Overview||Automated investment management robo-advisor platform|
|Minimum Investment Amount||$2,500|
|Fee Structure||0.30% of AUM|
|Top Features||Goal's 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.|
|Contact & Investing Advice||Available 24/7 by phone or email|
|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||None specific to Ally Invest Managed Portfolios|
What Differentiates Ally Invest Managed Portfolios Robo-Advisor From Competitors
As a robo-advisor, Ally Invest Managed Portfolios is similar to the competition. Your portfolio allocations are determined after completing an investment goals and risk tolerance questionnaire. From your responses, Ally Invest Managed Portfolios creates a portfolio of ETFs designed to fit your profile. The Ally robo-advisor then manages and rebalances your investments as necessary.
Ally Invest Managed Portfolios is distinct in it’s investment fund offerings. The Ally robo-advisor offers excellent diversification with just eight 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.
Additionally, Ally Invest Managed Portfolios departs from standalone robo-advisors in it’s 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. The successor to TradeKing, 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. It has more than $66 billion in customer deposits.
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Unlike many online banks, 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.
Who Benefits from the Ally Invest Managed Portfolios Robo-Advisor?
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.
With an advisory fee of 0.30%, a $100,000 portfolio can be professionally managed for just $300 per year. 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 and innovative loan programs.
So, if you want a one stop shop for both managed robo-advisor investing and access to DIY investment tools, you might want to study this Ally robo-advisor review.
Ally Invest Managed Portfolios Robo-Advisor Drill Down
Ally Invest 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. As is the case with most robo-advisors, you cannot place any trades within your account.
In addition to ETFs, between 1% and 2% of your portfolio will be held in cash. A small cash position is seen as a form of diversification, and also acts as a buffer for rebalancing. Ally joins Schwab Intelligent Portfolios in a commitment to a small cash position. We support maintaining a cash position as a stabilizing influence on your portfolio.
There are five basic portfolios in the Ally robo-advisor:
- Moderate Growth
- Aggressive Growth
Ally Managed Portfolio Returns
The backdated returns of each Ally managed portfolio is as follows (net of advisory fees and ETF expenses):
Investment Portfolio Composition
As is the case with many robo-advisors, Ally Invest Managed Portfolios uses ETF’s from Vanguard and iShares. Since Ally Invest does not have its own proprietary funds, all ETF’s are from third-party sources.
Ally Invest Managed Portfolios indicates the following funds are used in the construction of portfolios:
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.
The Ally robo-advisor offers the among the most conservative option for investors of the digital advisors, which is great for older retirees and those seeking cash preservation over growth.
Other Ally Invest Managed Portfolios Feature
Automatic Rebalancing. Your asset allocations are updated regularly, based on your investor profile and market conditions.
Ally Bank Mobile App
There is no mobile app specific to Ally Bank Managed Portfolios, but Ally does have an app that enables you to access your accounts with Ally Bank, Ally Invest and Ally Invest 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.
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.
Fees. The advisory fee is 0.30% 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.
Ally Invest Managed Portfolios Robo-Advisor Sign-up Process
In order to open up 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 “Get My Recommendation” input screen. By answering the six questions indicated, 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.
I completed the screen indicating age 30, preparing for retirement, investing for the long term, high risk tolerance, $100,000 in liquid assets, and plan to start investing with $25,000. The results yielded an asset allocation with 78% investing in stock funds, 20% invested in bond funds and 2% in cash.
Individual robo-advisors vary in their definitions of conservative through aggressive. This moderately aggressive growth portfolio seems reasonably allocated among the stock, bond and cash asset classes.
Here’s the recommended portfolio:
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
Ally Invest Managed Portfolios Robo-Advisor Pros and Cons
Ally Invest Robo-Advisor Pros
- The diversified ETF selection is superior to some competitors more vanilla fund choices.
- If you also have an account with Ally Invest, you can have part of your portfolio professionally managed, while maintaing 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.
- 24/7 customer service.
Ally Invest Robo-Advisor Cons
- No tax-loss harvesting is offered on taxable accounts (does not apply to retirement accounts). Although there’s debate over the viability of tax-loss harvesting.
- There are lower fee stand alone robo-advisors, with more features. Betterment and Wealthfront charge just 0.25%, and Wealthfront manages the first $10,000 for free. Among competing large broker robo-advisors, Charles Schwab Intelligent Portfolios has no management fee at all.
Ally Invest Managed Portfolios Robo-Advisor Review Wrap Up
As a relative newcomer on the robo-advisor scene, Ally Invest Managed Portfolios main defining advantage is it’s broad ETF choices. Yet, you’ve seen in this Ally Invest robo-advisor review that another top differentiating feature is access to the broad suite of Ally products. The final Ally robo-advisor advantages are the opportunity to change your asset allocation at will and a reasonable fee structure.
Ultimately, a major advantage to this Ally robo-advisor is the Ally financial services connection. As the successor to TradeKing, Ally Invest is one of the very best and most competitive self-directed trading platforms in the industry. Meanwhile, Ally Bank offers some of the best in online banking services, including very high interest rates on savings products 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.