Editorial Review

Ally Invest Managed Portfolios Review 2020: Pros, Cons and How It Compares

Ally Managed Portfolios is best for retirement investing and loyal Ally clients who want their investing and banking services under one roof.

Kevin Voigt, Arielle O'SheaJanuary 2, 2020

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Our Take

4.0

NerdWallet rating 

The bottom line: With a new no-management-fee cash-enhanced portfolio option along with its standard investment options, Ally Invest Managed Portfolios is best for retirement accounts and current Ally customers.

Ally Invest Managed Portfolios

Ally Invest Managed Portfolios

Fees

0.0%

with Cash-Enhanced Managed Portfolio; 0.3% otherwise

Account Minimum

$100

Promotion

None

Pros & Cons

Pros

  • Solid investment selection.

  • Integration for Ally bank and brokerage clients.

Cons

  • No tax-loss harvesting.

Compare to Other Advisors

Wealthfront
Betterment
Fees

0.25%

management fee

Fees

0.25%

management fee

Account Minimum

$500

Account Minimum

$0

Promotion

$5,000

amount of assets managed for free

Promotion

Up to 1 year

of free management with a qualifying deposit

Full Review

Ally Invest Managed Portfolios offers a broad choice of investments, seamless integration with Ally's banking arm and, in a recent change, the potential to have your assets managed for free.

Investors can avoid advisory fees with Ally's Cash-Enhanced Managed Portfolio, which requires they keep 30% of their portfolio in cash. (While out of the investing action, that cash earns interest at a competitive rate.) Customers who don’t want so much of their holdings in cash can opt for a lower allocation with Ally's legacy Managed Portfolio, which charges an annual advisory fee of 0.3% of assets.

Either way, Ally Invest Managed Portfolios creates and maintains a diversified portfolio of exchange-traded funds, and boasts features like Goal Tracker, a wealth-forecasting tool that simulates a range of possible investment outcomes based on various market returns. Existing Ally Bank clients can view their checking and savings accounts, Ally Invest brokerage account and managed account within one dashboard.

Ally Invest Managed Portfolios is best for:

  • Existing Ally banking or brokerage customers.

  • Hands-off investors.

  • Automatic rebalancing.

Ally Invest Managed Portfolios at a glance

Account minimum

$100

Account management fee

  • 0% for clients who opt for the Cash-Enhanced Managed Portfolio, which requires a 30% cash allocation.

  • 0.30% for clients who opt for the legacy Managed Portfolio option, which does not have that cash requirement.

Investment expense ratios

Expense ratios range between 0.11% and 0.17%, depending on portfolio.

Account fees (annual, transfer, closing)

$50 IRA closing fee; no fee to close brokerage account.

Portfolio mix

Portfolios pull from 17 ETFs covering a variety of asset classes. Tax-optimized, income and SRI portfolio options available.

Accounts supported

  • Individual and joint nonretirement accounts.

  • Roth, traditional, and rollover IRAs.

Tax strategy

Tax-optimized investments in taxable accounts. No tax-loss harvesting.

Automatic rebalancing

Free on all accounts

Human advisor option

Not offered

Tools

Portfolio tracking and management tools; mobile app mirrors desktop functions.

Bank account/cash management account

Access through Ally Bank to a savings account with a competitive APY.

Customer support options (includes website transparency)

Chat, email and phone support 7 a.m. - 10 p.m. ET, 7 days a week.

Promotion

None

Where Ally Invest Managed Portfolios shines

Free-management portfolio option: Ally is offering free management for clients who opt into its Cash-Enhanced Managed Portfolio, which requires investors keep 30% of their portfolio in cash (where the money earns interest at a competitive rate, but is not invested). Ally introduced the new offering to target new investors as a "try-it-first experience" before potentially upgrading to the full-fee, fully invested service.

One big drawback: A 30% cash allocation is more typical for an investor closer to retirement who wants to protect their savings rather than those at the start of their investment journey. Investors who don't want to hold that much in cash can opt for a more traditional portfolio allocated based on their age and risk tolerance for a 0.3% management fee.

Investments: As at many other robo-advisors, Ally Invest Managed Portfolios’ investment portfolios are made up of ETFs. From a menu of 17 funds, each portfolio contains around nine ETFs, with expense ratios that range from 0.11% to 0.17%, depending on the portfolio. Unlike many other brokers, Ally does not have proprietary funds and so does not use its own funds in its managed portfolios.

New customers are directed to an assessment, with questions that determine risk tolerance and goals and help the firm select an investment strategy for the client. The questions gauge how comfortable investors are with large portfolio fluctuations and what their investment time horizon is. The assessment then suggests a portfolio and provides details about the asset allocation.

Ally Invest Managed Portfolios are monitored and automatically rebalanced as needed. In 2019, Ally rolled out new tax-optimized, income-based and socially responsible investing portfolios.

Integration with Ally: Current Ally account holders — both of the bank and brokerage arms — can open an Ally Invest Managed Portfolio account and easily view all of their accounts in one place. The platform is also mobile-responsive and consistent across devices. You cannot, however, combine self-directed and managed investment accounts, and Ally Invest Managed Portfolios’ minimum balance requirements are separate from any other assets held at Ally.

Customer service: Although robo-advisors are by definition hands-off investing, it's comforting to know human help is a phone-call away if you've got a midnight question about creating your account: Ally Invest Managed Portfolios includes 24/7 customer support.

Where Ally Invest Managed Portfolios falls short

Tax-loss harvesting: The company doesn’t offer this feature, which is standard at many robo-advisors. This year, however, customers with nonretirement accounts can opt into a tax-optimized portfolio, which uses municipal bond ETFs to help reduce Uncle Sam's cut.

Is Ally Invest Managed Portfolios right for you?

That depends a great deal on what kind of account you’re interested in and which features matter most to you. The service is best suited to retirement accounts or loyal Ally customers who want to house a managed account, a trading account and their bank accounts under one roof.

While aimed at new investors, the 30% cash allocation of Ally Invest's new Cash-Enhanced Managed Portfolio may actually be better suited for customers closer to retirement. The lack of tax-loss harvesting will be an issue for investors with taxable brokerage accounts.