Ally Invest versus Vanguard brokerage firms comparison: IRA, fees, commissions, stocks/funds offerings, differences, pros and cons. Which broker to choose?

Overview

Ally Invest recently dropped its equity commission all the way to $0. Does this mean the brokerage firm is now a better value than Vanguard? With our research, you will know the answer.

Pricing

Vanguard Brokerage Review
Rating Ally Invest rating Vanguard brokerage company rating
Stocks, ETFs $0 $0
Options (per contract) $0.50 $1.00
Mutual Funds $9.95 $20
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $20
IRA Termination Fee $25 $0
Outgoing Wire Fees (Domestic)$30$10
Full Account Transfer Out$50$0
Partial Account Transfer Out$10 per security, $50 maximum$0
Open an account Up to $3,500 cash bonus + $0 trades + transfer fee rebate. None

As you see from the table above, Ally Invest is better priced for options traders. In other assets the two brokers have similar pricing.


Available Securities

Ally Invest offers a large range of tradable instruments. There are fixed-income assets, equities, currencies, options, funds (including mutual, closed-end, and exchange-traded), penny stocks, and OTC stocks.

Vanguard clients get the same array that Ally Invest offers minus forex.

Looks like Ally Invest has a slight advantage in the first category.


Education and Research

Ally Invest customers have several avenues of investment research. First is security information. Profiles offer financial documents from SEC filings, earning histories, news articles, and analysts’ trade recommendations. There is only one pdf report; it’s from CFRA.

Mutual fund profiles show Lipper ratings, a rare departure from Morningstar. We also liked risk analysis metrics, such as R-Squared and the Sharpe ratio.

Ally Invest’s screeners are easy to find and use. The stock screener uses sector, market cap, 5-year price performance, dividend yield, and P/E ratio as default search criteria. Other choices include % float and technical events. A screen can be saved, and Ally offers pre-defined searches, such as small cap value.

The Ally Invest site offers general financial education in conjunction with Ally Bank. Both banking and investing articles are shown—and there are a few videos.

Over at Vanguard’s site, there is another collection of articles. Some of the example articles we found include investing during periods of volatility, global markets, and saving for retirement. Both Ally Invest and Vanguard have YouTube channels. Vanguard has many more videos than its rival.

As for security profiles on the Vanguard site, we found similar data points. For example, analysts’ trade recommendations are shown for stocks. There are two pdf reports for major stocks: Argus and MarketGrader.

Mutual fund profiles don’t offer Lipper ratings. In fact, there are no ratings at all. There is data on portfolio holdings, expense ratio, fees, and annual performance.

The broker’s stock screener is hard to find. We had to click through several pages to finally locate the hyperlink to generate it. Once opened, the software gave us several search variables including industry, closing price, and percent change.

Overall, it’s a dead heat here.


Website Trading

Traders at Ally Invest get to use a fairly basic website to buy and sell securities. It has a trade bar at the bottom of the browsing window. It can send orders to exchanges with multiple duration choices and order types. Option contracts can be traded on it, but not mutual funds.


Ally Invest vs Vanguard


Alerts can be established for a security based on several criteria and sent via e-mail, text message, or Twitter. Multiple watchlists can be created (they can only be shown in a pop-up window), and option chains can be accessed from a security’s profile page. A really unique feature that we liked on the option chains page is pop-up red sell and green buy buttons when we hovered over a bid or ask price for a contract.

Ally Invest’s crown jewel in this category is LIVE, a browser-based trading system. Charting comes with several important tools. We found approximately 100 technical studies and eight graph styles. A chart has a link to a video that explains how to use the charting program. A graph can be detached and shown full-screen or used as a small window in the browser platform.

Other notable features of Ally’s browser platform include an advanced trade ticket, several good option tools including a profit-loss diagram, and a bond screener. Although LIVE doesn’t offer multi-leg option strategies, the website does.

Vanguard’s website doesn’t offer multi-leg option plays. Only calls and puts are available. Moreover, the broker doesn’t have a browser platform, nor is there a trade bar on the website. So the website is all traders have at Vanguard; and the website isn’t overly spectacular. Alerts and multiple watchlists are available on Vanguard’s site.


Vanguard versus Ally Invest


Charting on Vanguard’s site offers fewer technical indicators and graph styles than LIVE provides; moreover, a chart cannot be detached or shown the full width of the monitor.

The victory here is awarded to Ally Invest.


Desktop Program

Ally Invest customers who don’t find what they’re looking for in LIVE or on the company’s website can instead use Quotestream (if they place ten trades per month). This is a very advanced software program that provides some professional-level features. Among them are Greek numbers for option contracts, Level II data, market movers, and real-time alerts.

Vanguard doesn’t offer a desktop platform and so loses another category.


Mobile Apps

The Ally Invest app has Zelle transfers, a very unique feature. Also available is mobile check deposit. While stocks, exchange-traded funds, and option contracts can be traded on the platform, there are a few flaws. First is the fact that there are no multi-leg option strategies. Second, there is no mutual fund trading. On the positive side, we did like the app’s charting program.

Strangely, Vanguard’s app doesn’t offer any charting other than basic graphs for indexes. It does have mobile check deposit, but the software doesn’t permit trading in non-Vanguard funds. These have to be traded on the website, which seems like a nuisance to us. As for options, they can’t be traded on the app at all.

We’ll take Ally here.


Other Services

Dividend Reinvestment Program: Both Ally Invest and Vanguard provide automatic dividend reinvesting.

IRA’s: Individual Retirement Accounts are available at both companies in this investigation. Ally Invest charges $25 to close an IRA, while Vanguard charges $20 and $25 fees for holding some Vanguard funds in SEP and SIMPLE accounts.

Automatic mutual fund investing: Vanguard offers recurring deposits into Vanguard (only Vanguard) funds. Ally Invest offers nothing here.

Vanguard is the winner of the last category.


Promotions

Ally Invest: Up to $3,500 cash bonus + $0 trades + transfer fee rebate.

Vanguard: no promotions.



Our Recommendations

Mutual Fund Traders: With Vanguard’s mutual fund screener, we found 6,453 securities that were available to new investors. At Ally Invest, the number was 11,250. Ally Invest doesn’t have any no-load, no transaction-fee funds; but Vanguard does. We can recommend either broker.

Long-Term Investors and Retirement Savers: Ally Invest doesn’t have a self-employed 401(k), but Vanguard does. But Ally has the better commission schedule. Again, we could go in either direction.

Beginners: Ally Invest has 7am-10pm ET, 7 days a week customer support, so we propose it over Vanguard.

Stock and ETF Trading: Ally Invest has the better commission schedule and better platform. Easy choice.


Ally Invest vs Vanguard: Results

Ally Invest triumphed over Vanguard in most categories. While Vanguard has a much larger client base, those investors should seriously consider Ally Invest.




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