Ally Invest Managed Portfolios Review 2021: Pros, Cons and How It Compares

Ally Managed Portfolios is best for retirement investing and loyal Ally clients who want a one-stop shop for their investing and banking services.

Kevin Voigt, Arielle O'SheaJanuary 5, 2021
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Our Take

4.5

NerdWallet rating 

The bottom line: With a 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

no promotion available at this time

Pros & Cons

Pros

  • Solid investment selection.

  • Integration for Ally bank and brokerage clients.

Cons

  • No tax-loss harvesting.

Compare to Other Advisors

Betterment
Wealthfront
SoFi Automated Investing
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Fees

0.25%

management fee

Fees

0.25%

management fee

Fees

0%

management fee

Account Minimum

$0

Account Minimum

$500

Account Minimum

$0

Promotion

Up to 1 year

of free management with a qualifying deposit

Promotion

$5,000

amount of assets managed for free

Promotion

Free

career counseling plus loan discounts with qualifying deposit

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Full Review

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

Investors can avoid advisory fees with Ally's Cash-Enhanced Managed Portfolio, which requires that 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 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 such as 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 Managed Portfolio option, which does not have that cash requirement.

Investment expense ratios

Average expense ratio of 0.07%.

Account fees (annual, transfer, closing)

  • $25 IRA closing fee.

  • No fee to close brokerage account.

  • $50 for transfer out (full or partial).

Portfolio mix

  • Portfolios pull from ETFs covering 17 different asset classes.

  • Portfolio mix is well-diversified but lacks exposure to non-market correlated assets like real estate investment trusts (REITs) and commodities.

  • Tax-optimized, income and socially responsible investing (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.

Bank account/cash management account

Clients can instantly transfer cash through One Ally Transfer to Ally Bank to access 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.

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 that investors keep 30% of their portfolio in cash, where the money earns interest at a competitive rate but is not invested. Ally targets new investors with this option 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 exchange-traded funds. These ETFs cover 17 asset classes and 32 portfolios, with an average expense ratio of 0.07%, depending on the portfolio. Customers can choose among Core, Tax Optimized, Income and Socially Responsible allocations. Ally Invest Managed Portfolios are monitored and automatically rebalanced as needed. Unlike many other brokers, Ally does not have proprietary funds, so it does not use its own funds in its managed portfolios.

New customers take an assessment to determine their risk tolerance and goals. 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.

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 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.

For those who want a savings account option, Ally Invest customers can instantly transfer money to Ally Bank and earn a 0.8% annual percentage yield with a deposit account.

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 question about creating your account. Ally Invest Managed Portfolios customer support is available during extended business hours 7 a.m.-10 p.m. Eastern, seven days a week by phone, email and chat.

Where Ally Invest Managed Portfolios falls short

Tax-loss harvesting: The company doesn’t offer this feature, which is standard at many robo-advisors. In taxable accounts, tax-loss harvesting involves selling losing investments to offset the gains from winners. 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 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 prefer a one-stop shop for a managed account, a trading account and their bank accounts.

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

Disclosure: The author held no positions in the aforementioned securities at the time of publication.