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
with Cash-Enhanced Managed Portfolio; 0.3% otherwise
no promotion available at this time
Pros & Cons
Solid investment selection.
Integration for Ally bank and brokerage clients.
No tax-loss harvesting.
Compare to Other Advisors
Up to 1 year
of free management with a qualifying deposit
amount of assets managed for free
career counseling plus loan discounts with qualifying deposit
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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.
Ally Invest Managed Portfolios at a glance
Account management fee
Investment expense ratios
Average expense ratio of 0.07%.
Account fees (annual, transfer, closing)
Tax-optimized investments in taxable accounts.
No tax-loss harvesting.
Free on all accounts.
Human advisor option
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.