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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As an expert in the field of online banking and brokerage, with a deep understanding of Ally Bank and its online brokerage, Ally Invest, I can provide comprehensive insights into the concepts discussed in the article.
Ally Bank and Ally Invest Overview: Ally Bank is well-known for its online-only banking services and high-yielding savings accounts and CDs. Ally Invest, the online brokerage arm of Ally Financial, was launched in 2017 and has gained popularity among self-directed investors, ranging from beginners to experienced traders.
Customer Success and Recognition: Ally Invest has demonstrated strong customer success, with approximately 525,000 account holders. Notably, it has been recognized in the 12th annual IBD Best Online Brokers survey, ranking as one of the four Best Online Brokers alongside Fidelity Investments, Charles Schwab, and Merrill Edge.
IBD's Recognition Criteria: The IBD survey highlighted Ally Invest's outstanding performance in various attributes, including website security, site performance, portfolio analysis, and incentives, discounts, and pricing.
One-Stop Financial Solution: Ally Invest, in line with its parent company's ethos, aims to be a one-stop-shop for customers on their financial journey. The broader "ecosphere" of digital financial services includes everyday banking, cash-back credit cards, auto and home loans, financial planning via "Personal Advice," and roboportfolios.
Customer Experience and Dashboard: Ally Invest received the highest overall customer experience score of 65.3 among the eight online brokers surveyed. The trading dashboard is described as a clean, one-screen utility for investors, comparable to an automobile dashboard.
Focus on Education and Research: Ally Invest emphasizes education, research, and keeping customers informed about market trends. It scored well in categories such as portfolio analysis, timely market information, trade ideas, and up-to-the-minute data.
Research Tools and TipRanks Integration: The online brokerage offers research tools, and recently introduced TipRanks' "Smart Score" for assessing a stock's potential. This service incorporates analyses from Morningstar and CFRA to provide a comprehensive view for customers.
Ally Invest's Origins: Ally Invest has a historical connection to General Motors Acceptance Corp. (GMAC), with roots dating back to 1919. The transition from GMAC to Ally Bank occurred in 2009, with Ally Financial going public in 2014. Ally Invest was launched in 2017, accelerated by Ally Financial's acquisition of TradeKing in 2016.
Services, Incentives, and Accessibility: Ally Invest offers a low-cost way to invest, with $0 commissions on U.S.-listed stocks, ETFs, and options. The platform, integrated into the Ally Bank app, provides access to trading, research, and screening features. No account minimum is required for a self-directed brokerage account, and there are roboportfolio options with a $100 initial deposit.
Customer Service and Account Transition: Ally Invest prides itself on customer service, offering 24/7 support. The brokerage also provides a $75 credit to cover costs when transferring assets of $2,500 or more from another brokerage.
Democratizing Investing: Ally Invest aims to democratize investing by eliminating fees and making investing accessible to all. It removed the $9.95 transaction fee on its mutual fund offerings, further aligning with its commitment to removing barriers for investors.
Future Plans and Technology Integration: Ally Invest is exploring the use of artificial intelligence (AI) tools to enhance customer service, indicating a commitment to continuous improvement and leveraging technology for better customer interactions.
In summary, Ally Invest has positioned itself as a reputable online brokerage, garnering recognition for its customer-centric approach, user-friendly platform, and commitment to providing a comprehensive financial ecosystem for its customers.
