Ally Invest Review 2020 – What Is the Ally Invest Managed Portfolio?

Ally Invest Review 2020 – What Is the Ally Invest Managed Portfolio
Ally Invest Review 2020 – What Is the Ally Invest Managed Portfolio

Ally Financial has long been a leader in the online savings and checking account world, and now it has dipped its feet into the world of Robo investing. Let’s check it out in our Ally Invest Cash-Enhanced Managed Portfolio review.

Back in 2016, Ally purchased TradeKing, a popular stock brokerage. Using its technology, Ally created Ally Invest, an online stock broker that ranks consistently high for a lack of fees, no account minimums, 24/7 customer service and trading options.

Now Ally Invest has rolled out its Cash-Enhanced Manage Portfolio, a product designed to provide custom investment portfolios with a protective cash buffer.

Best of all, there are no advisory fees.

We took a further look into Ally Invest Review Robo portfolio, and this is what we found.

Review What Is the Ally Invest Cash-Enhanced Managed Portfolio?

The Ally Invest Cash-Enhanced Managed Portfolio is managed by Ally Invest, the investing branch of Ally Financial. Through its robo-advisor technology, Ally Invest gives investors the chance to have professionally designed and managed portfolios, complete with personalized advice and investment selections.

It’s true set-it-and-forget-it investing. Enter information about your investment goals, and Ally’s team will design a portfolio to suit your needs.

The bulk of your portfolio will consist of exchange-traded funds (ETFs), but 30% of your portfolio will be set aside as a cash buffer. Your cash will earn interest (currently around 1.90%). This was designed to protect your portfolio from market downturns. Your cash allocation will be automatically maintained.

Cash Enhanced Managed Portfolios can be made for a variety of investment types, including taxable accounts and IRAs.

There are four portfolio types that Ally may recommend for you:

  1. Income: Designed for investors near or in retirement, the Income portfolio is focused on high dividend yields with a conservative risk profile.
  2. Core: The most diversified of the four, with domestic, international and fixed-income assets. You can choose your own level of risk.
  3. Tax Optimized: Recommended for investors in higher tax brackets and designed to maximize your investment potential while reducing your tax burden.
  4. Socially Responsible: Centered around ethical companies that practice energy efficiency, sustainability, or otherwise environmentally friendly initiatives.

If you’re an existing Ally Bank customer, you can view your Ally brokerage account and managed account on the same dashboard as your checking and savings accounts. Your account also includes features like Goal Tracker, a forecasting tool that simulates a range of possible outcomes based on different market returns for your investments.

With an emphasis on ease and simplicity, the Ally Invest Cash-Enhanced Managed Portfolio is very in-line with Ally’s other offerings. The dashboard is easy to navigate, and it’s easy to get started online.

Ally Invest Managed Portfolios Fees & Features Review

Minimum Investment$100
Fees0.00
AccountsTaxable, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, SIMPLE IRA, Custodial
401(k) AssistanceNo
Tax Loss HarvestingNo
Portfolio RebalancingYes
Automatic DepositsWeekly, biweekly, monthly, quarterly
AdviceAutomated
Smart BetaNo
Socially ResponsibleNo
Fractional SharesNo
AccessWeb-Based, iPhone App, Android App
Customer ServiceEmail, Phone and Live Chat: 24/7

How Does the Cash-Enhanced Ally Invest Managed Portfolio Work?

The Ally Invest Cash-Enhanced Managed Portfolio is an automated investing service. Your initial deposit is $100 (a recent change — it formerly required $2,500 to get started).

To get started you have to answer a few questions about your finances and why you’re investing. The questions begin with your reason for investing and your desired goal amount, followed by how long you want to invest for and then picking your risk tolerance.

Next, you answer how much you currently have in liquid assets and how much you plan to start investing with, and finally, you choose if this will be a retirement-focused investment account or a taxable one.

With all that information, Ally recommends a portfolio breakdown with a mix of ETFs and cash that it believes will help you reach your financial goals.

Ally shows you the historical performance of the recommended funds, and all portfolio returns assume that you’ll reinvest your dividends and capital gains.

Perhaps the best thing about using this portfolio is that it’s now free from any advisory fees.

The Cash-Enhanced Managed Portfolio comes with automatic rebalancing to keep your assets in their chosen allocation range. Automatic rebalancing means you don’t need to manually maintain your portfolio allocations; the algorithm within the program does that for you.

What the portfolio doesn’t offer is tax-loss harvesting. Tax-loss harvesting is the practice of selling stocks that an investor has realized a loss on, and thereby offsetting taxes on capital gains. Ally doesn’t offer this, which means all losses have to be absorbed and may affect the investor’s capital gains tax rate unfavourably.

Ally is a member of the Securities Investor Protection Corporation (SIPC), meaning up to $500,000 of your investments are protected.

Beyond that, Ally’s partner clearing firm, (Apex Clearing) also has additional insurance to supplement the SIPC protection. Should the SIPC encounter any issues, this insurance provides protection for securities and cash up to an aggregate of $150 million.

Pros & Cons

Pros

  • Zero Advisory Fees — The Ally Invest Cash-Enhanced Managed Portfolio is now free of any advisory fees.
  • SIPC Protection — Ally is a member of the Securities Investor Protection Corporation (SIPC), meaning up to $500,000 of your investments are protected.
  • 24/7 Customer Service — You can always reach help when you need it.
  • Automatic Rebalancing — There’s no need to manually maintain your portfolio allocations.
  • Cash Buffer — Each portfolio has a 30% cash buffer that earns interest. This is designed to help protect your portfolio from market downturns.

Cons

  • No Tax-Loss Harvesting — Ally Invest doesn’t offer this money-saving tool, unlike other similar robo advisors.

Ally Invest Review Summary

The Ally Invest Cash-Enhanced Managed Portfolio offers a hands-off approach to investing. Opening an account is easy, and the automatic rebalancing means that these accounts are perfect for those who don’t want to do the heavy lifting with their investments.

And now that this portfolio is fee-free, it makes a great choice, especially if you’re already banking with Ally or have an Ally Invest brokerage account.