Ally Invest Robo Portfolios Review 2023: Pros, Cons and How It Compares
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Reviewed in: Oct. 2022
Period considered: Aug. - Oct. 2022
The bottom line:
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Pros & Cons
Solid investment selection.
Integration for Ally bank and brokerage clients.
No tax-loss harvesting.
Compare to Other Advisors
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Where Ally Invest Robo Portfolios shines
Free management: Ally Invest Robo Portfolios offers clients the potential to have their assets managed for free. But, the 30% cash requirement for free management in Ally Invest's Cash-Enhanced Managed Portfolio may be better suited for customers closer to retirement.
Variety of investment options: Its platform offers a broad choice of investments, allowing clients to create and maintain a diversified portfolio of exchange-traded funds. It also boasts features such as Goal Tracker, a wealth-forecasting tool that simulates a range of possible investment outcomes based on various market returns.
Consolidated banking and investing: Loyal Ally customers can have a one-stop shop for a managed account, a trading account and their bank accounts.
Customer support access: If you need help, Ally Invest Robo Portfolios’ customer service has extended hours to help you when it’s convenient for you.
Where Ally Invest Robo Portfolios falls short
Tax strategies: The lack of tax-loss harvesting could pose an issue for investors with taxable brokerage accounts.
Ally Invest Robo Portfolios is best for:
Existing Ally banking or brokerage customers.
Ally Invest Robo Portfolios at a glance
Reviewed: Oct. 2022
Period considered: Aug. - Oct. 2022
Account management fee
Investment expense ratios
Average expense ratio of 0.07%.
Account fees (annual, transfer, closing)
Socially responsible portfolio options
Clients can choose to invest in SRI portfolio. If held in cash-enhanced portfolios, SRI portfolios are free.
Tax-optimized investments in taxable accounts.
No tax-loss harvesting.
Free on all accounts.
Human advisor option
Investors with a minimum of $100,000 in investable assets get dedicated human advice.
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 how easy it is to find key details on the website)
Customer support is available 24/7 by phone, chat, and email. Specific portfolio specialists available Monday–Friday, 8 a.m. – 5:30 p.m. Eastern.
» Want to check out other providers? See our top picks for robo-advisors.
More details about Ally Invest Robo Portfolios’ ratings
Account minimum: 4 out of 5 stars
Many robo-advisors require an account minimum requirement. For those with high minimums, investors who are just starting out may not be able to use that particular investment platform.
To open an Ally Invest Robo Portfolios account, there is an initial $100 minimum deposit. This account minimum is low relative to peers, though some platforms have no account minimums.
Account management fee: 5 out of 5 stars
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 but is not invested or FDIC insured. This cash allocation acts as a buffer against the ups and downs of the market and cannot be accessed like money in a savings account.
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. However, it could also serve as a buffer during periods of high inflation when savings accounts offer higher interest rates for cash. 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.
Investment expense ratios: 5 out of 5 stars
In addition to fees paid for account management, most mutual funds and exchange-traded funds have embedded investment costs called expense ratios. Expense ratios are expressed as a percentage of your investment and indicate the portion of your investment that goes to the manager of that particular fund. It’s important to compare the expense ratios from one robo-advisor platform with another because combining these fees with the account management fee and other account fees, provides your overall investment cost.
Ally Invest Robo Portfolios investment expense ratios average 0.07%, which is low compared with peers.
Account fees: 3 out of 5 stars
There can be other ancillary costs an investor might need to pay, especially when closing your account. With Ally Invest Robo Portfolios, closing an IRA will incur a $25 closing fee. And transferring your securities out will cost you a maximum of $50.
If you want paper statements, you will need to pay $4 and wire transfers cost $30. Both of these fees are fairly common compared with other brokerage accounts.
Portfolio mix: 3.5 out of 5 stars
As at many other robo-advisors, Ally Invest Robo 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. 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.
Socially responsible portfolio options: 5 out of 5 stars
People interested in socially responsible investing try to generate positive returns for their portfolio while using their dollars to support companies that align with their values.
Ally Invest Robo Portfolios allows you to select from four portfolio options to target your future goals. One option is its Socially Responsible portfolio, which invests in companies with ethical track records and actively focuses on sustainability, energy efficiency or other environmentally friendly practices. However, specific securities are not able to be excluded from your portfolio. There's also a fee for their SRI portfolios if they aren't held in a cash-enhanced portfolios.
Accounts supported: 2 out of 5 stars
Many investors have several account types, such as a taxable brokerage account, retirement accounts, trust accounts or 529 accounts to save for educational expenses.
Ally Invest Robo Portfolios can support taxable brokerage accounts (individual, joint and custodial) along with various IRAs (traditional, rollover and Roth).
Tax strategy: 2 out of 5 stars
When selling investments in taxable brokerage accounts, if the sale generates capital gains, you’ll get hit with a tax liability. There are various ways that investment platforms can help minimize your tax burden. One way is through tax-loss harvesting, which involves selling losing investments to offset the gains from winners.
Ally Invest Robo Portfolios doesn’t offer this feature, which is standard at many robo-advisors. However, customers with nonretirement accounts can opt into a tax-optimized portfolio, which uses municipal bond ETFs to help reduce Uncle Sam's cut.
Automatic rebalancing: 5 out of 5 stars
As the markets move, the allocation within your portfolio will shift as well. When your allocation shifts too much, you may be taking on too much risk or not enough risk to produce the returns you’re looking to achieve. Many investment platforms can help monitor changes to your portfolio allocation and proactively buy and sell to bring your portfolio back in-line with your target allocation.
Ally Invest Robo Portfolios monitors clients accounts daily and automatically rebalances as needed with no additional fees.
Human advisor option: 1 out of 5 stars
Sometimes, it can be helpful to work with a human financial advisor to ensure your investment portfolio is tailored to your needs. Some robo-advisor platforms offer access to human financial advisors, either included as part of their service offering or for an additional fee. Others do not, as robo-advisors are generally meant to be a no frills, automated investing service.
Ally Invest Robo Portfolios launched Ally Invest Wealth management in 2022, which provides personalized investing advice and guidance to investors through a fiduciary advisor. To access this service, customers must have a minimum of $100,000 in investable assets and it comes with a blended advisory fee of 0.75-0.85%.
Bank account/cash management options: 5 out of 5 stars
Current Ally account holders — both of the bank and brokerage arms — can open an Ally Invest Robo Portfolios account and easily view all of their accounts (checking and savings accounts, Ally Invest brokerage account and robo account) within one dashboard. The platform is mobile-responsive and consistent across devices. You cannot, however, combine self-directed and robo investment accounts, and Ally Invest Robo 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 0.5% annual percentage yield with a deposit account, compounded daily. There are no monthly maintenance fees or minimum balance requirements. You can also opt into Ally’s Overdraft Transfer Service to protect your checking account from overdraft fees using automatic transfers from your Ally savings or money market accounts.
And, there are many tools to help make saving easier — using buckets to save for specific goals and boosting your savings with recurring transfers, roundups (rounding purchases up to the nearest dollar and transferring into your savings) and surprise savings (analyzing your checking account for safe-to-save money and transferring it to savings on your behalf).
Customer support options: 4.5 out of 5 stars
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 your account. Ally Invest Robo Portfolios has moved to a 24/7 customer support model, with phone, chat, and email support available at any time. Specific portfolio specialists can be accessed during extended business hours 8 a.m. to 5:30 p.m. Eastern time, Monday through Friday.
Is Ally Invest Robo Portfolios right for you?
That depends on what kind of account you’re interested in and which features matter most to you. This 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.
Although some investors don’t mind having a buffer, 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.
How do we review robo-advisors?
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. robo-advisors. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across 16 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating robo-advisors and our process, read our full methodology.