Ally Invest Robo Portfolios offers a variety of features for beginner and hands-off investors. Its low minimum investment of $100 makes the account accessible to just about any investor, and it offers a suite of benefits with low or no fees. In this Ally Invest Robo Portfolios review, we'll look at what this platform offers, how much it costs, and how to determine whether it's right for you.
Ratings Methodology
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Rating image, 4.0 out of 5 stars.
4.0 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
With competitive pricing, low minimums, and features such as automatic rebalancing, Ally Invest Robo Portfolios is a great choice for anyone without a lot of cash to spend.
Fees:
$0 per trade, management fee 0.30%, expense ratio 0.05%-0.20%
Account Minimum:
$100
Open Account for Ally Invest Robo Portfolios
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Full Ally Invest Robo Portfolios review
This robo-advisor is a good fit for: People who want to take the guesswork out of their investments. Investors who seek competitive fees, are starting with small investment amounts, and folks who prefer a conservative investment strategy will all find this robo-advisor valuable.
Pros
- Competitive management fee
- Low account minimum
- High-yield cash management
- Portfolio selection for differing needs
Cons
- No tax-loss harvesting
- Limited account options
Top perks
Low or no management fee
Ally Invest Robo Portfolios offer two account options: cash-enhanced and market-focused.
Its cash-enhanced account has no management fee and is a good fit for conservative investors. It keeps 30% of your portfolio in an account similar to a high-yield savings account (though not FDIC-insured or liquid like a savings account). The other 70% is invested in a portfolio of exchange-traded funds (ETFs). The underlying investment funds in your portfolio will have small fees (known as expense ratios), but that's it.
The market-focused portfolio option invests about 98% of your account's value, and it charges a 0.30% annualized advisory fee. This isn't the lowest fee in the industry, but it's certainly competitive with many of the best robo-advisors. This option is better for more aggressive investors who want to give their money the best chance at growth and are willing to pay the accompanying fee.
Low minimum investment
Ally Invest Robo Portfolios requires a $100 minimum investment to get started. It doesn't stand alone in that low minimum, but it is relatively low for managed portfolios. Some competitors require a $500 minimum investment or more to open an account, while some robo-advisors let you invest with as little as $1 (usually with higher fees).
Automatic rebalancing
All robo-advisors we know of rebalance portfolios over time, but some only do it at certain time intervals, such as annually or quarterly. Ally Invest rebalances portfolios as needed in response to market fluctuations, so your investments are more likely to be optimized for the investment goals your portfolio is designed to achieve.
24/7 customer support
Many robo-advisors have dedicated customer service hours, and others only provide support through chat or email. Ally Invest has a customer support line that lets you speak with a person 24 hours a day, seven days a week.
Strong return on cash
Ally's cash-enhanced option keeps 30% of the portfolio in cash, instead of securities, at a higher yield than you're likely to get on cash held with most other brokers.
Portfolio types
Ally offers four made-for-you portfolio options:
- Core: highly diversified
- Income: for investors at or near retirement
- Tax optimized: a traditional or Roth IRA
- Socially responsible: invested in businesses that actively practice sustainability, energy efficiency or other eco-friendly initiatives
You'll select one of these four options when you set up your account, and you can adjust to customize your allocations to get the mix of risk versus reward that's right for you.
Ally integration
Your Robo Portfolio account will be integrated under the same login and managed through the same website or app if you have one of the following:
TIP
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What could be improved
More account types
You can open one of these types of investment accounts with Ally Invest Robo Portfolios:
- Individual brokerage account
- Joint brokerage account
- Custodial (UGMA/UTMA)
- Traditional IRA
- Roth IRA
- Rollover IRA
The platform doesn't support the broader variety of accounts you might find with some competitors (though they're rare with robo-advisors in general), including:
Access to human advisors
Some competitors offer access to human financial planners, which could help you with advice for a variety of situations like retirement strategies, saving for college, and buying a house. Ally Invest Robo Portfolio accounts don't offer this option -- all of the financial advice is automated, so this platform is best for hands-off investors.
Tax-loss harvesting
Some robo-advisors offer automatic tax-loss harvesting. This is a strategy that can save investors lots of money on capital gains taxes. Instead, it offers a tax-optimized portfolio, but that's not quite as powerful as a more aggressive tax-loss harvesting strategy, especially if your income puts you in a high tax bracket.
Alternatives to consider
If you want to cut the management fee: SoFi Automated Investing is one of the few robo-advisors that offers unlimited access to registered investment advisors with no management fee. On the downside, it doesn't offer tax-loss harvesting.
If you want tax-loss harvesting with a competitive management fee: Wealthfront offers account holders tax-loss harvesting, and its costs go toe to toe with top robo-advisors, though higher than Ally's no-fee option. Wealthfront requires a $500 minimum investment to open an account, and its best features cater to higher-dollar investors.
How Ally Invest Robo Portfolios works
Like most robo-advisors, Ally starts by asking you to fill out a questionnaire. (Note: You can answer the questions and see your investment recommendations without committing to opening an account.)
You'll answer a series of questions about your investment objectives, time horizon, assets, risk tolerance and more. From there, you'll pick the type of portfolio that best fits your objectives, and Ally will suggest an ideal asset allocation strategy for you.
Note that the default option is the cash-enhanced portfolio, which permanently keeps 30% of your portfolio in cash. It comes with no management fee, but creates a far more conservative investment strategy than some investors need -- especially younger investors with long time horizons to ride out the ups and downs of the stock market.
Services offered
Ally stands out for including these services with its robo-advisor:
- Portfolio customization
- Automatic rebalancing as needed
- 30% cash buffer in an interest-bearing account
Pricing and fees
The two main types of fees you might pay when investing through a robo-advisor are management fees and ETF expense ratios.
Ally offers two options for management fees:
- Cash-enhanced account: This option keeps 30% of your money in cash in an interest-bearing account, and it charges no management fees.
- Market-focused portfolio: This option invests nearly all of your money and charges a 0.30% management fee.
All of your money in an Ally Invest Robo Portfolio is invested in ETFs. Ally doesn't manage these funds, so they come with third-party fees called expense ratios. Ally doesn't publish the underlying expense ratios of its funds, but annualized fees between 0.05% and 0.20% are typical of the funds most robo-advisors use.
Customer service and support
There are two types of support that clients of a robo-advisor could need -- investment advice from a human being and help with technical issues. So let's take a look at how Ally Invest Robo Portfolios stacks up.
Ally Invest doesn't offer live financial advice to its robo-advisory clients. All of the financial guidance on the platform is via automated portfolio recommendations.
Account support is an area where Ally Invest shines. Unlike many rivals, which offer phone support only during limited hours (or not at all), Ally Invest has a phone support number that is staffed by real humans 24/7.
Ally Invest Robo Portfolios is right for you if:
- You value having an array of portfolio options.
- You're a conservative investor who's OK keeping a chunk of your investment in cash.
- You want to open a standard brokerage account, traditional or Roth IRA, or a custodial account.
- You have at least $100 to invest.
- You don't need financial planning advice from a human advisor.
- You want the ability to receive account support from a person at any time you need it.
About the Author
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
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