Ally Invest versus Betterment brokerage firm comparison: IRA, fees, commissions, benefits, pros and cons. Which broker to choose?

Overview of Betterment and Ally Invest

Betterment is well-known for its robo method of investing. But other brokerage firms have caught onto the trend, and they still manage to offer other trading services. Which model is better? Let’s find out.

Range of Investments

At Ally Invest, it’s possible to buy and sell equities, bonds (including zeros, strips, and CD’s), mutual funds, ETF’s, closed-end funds, option contracts, and currencies.

Betterment specializes in robo investing. And that’s all it offers, using ETF’s with low expense ratios.

Ally Invest is the clear outperformer in the first category.

Promotions

Ally Invest: Up to $3,500 cash bonus + 90 days of commission free trades (up to $500 in value).

Betterment: none right now.


Financial Education and Research

With its emphasis on autopilot investing, Betterment doesn’t provide many resources that would be of value to self-directed traders. There is no learning center on its site; nor are there any security analysis tools like a stock screener. During our investigation, we did find some account analysis tools.

At Ally Invest, we found a lot of learning resources. Videos and articles give overviews of many investing topics, such as trading when the market is down and selling options to generate income.

Stock and fund screeners are able to find assets based on many criteria. For example, the tools can look for potential investments based on market capitalization, P/E ratio, technical analysis, price history, and dividend yield.

Ally Invest is obviously the better choice here.

Trading Technology

Betterment clients don’t get a lot of advanced software. Because there are no self-directed accounts, the company provides tools for account management—and that’s it.


Betterment vs Ally


Over at Ally Invest, we found a trade bar after logging into the site. It is able to display real-time data, such as bid-ask spread, most recent price, and the day’s volume. Perhaps the best feature is the actual ability to submit orders straight from the bar.


Ally Live


A browser-launched platform called LIVE delivers a more advanced trading experience. Features include charting with technical studies, bond and mutual fund trading, market indexes, and a trade ticket. There are several duration options and order types. We didn’t find video news, Level II quotes, or direct access to specific market makers, a few weaknesses.

Betterment fails again.

Mobile Apps

For the same reason that its website is very simple, Betterment’s mobile platform doesn’t have much on it. Account management tools make another appearance. There are no trading tools to speak of.

Ally Invest customers get mobile check deposit and money movement tools. Option contracts can be traded on the platform, but for some reason not mutual funds. We found a good charting program that incorporates some technical indicators and a horizontal mode. Comparisons can also be made.


Ally vs Betterment


Ally Invest takes another victory.

Portfolio Management

Launched in 2010, Betterment was one of the first robo advisers. It has since appended human advisors to some packages for general financial advice; but software programs are responsible for all trading decisions.

There are two packages available with the firm. The first is the robo-only service; the price is 25 basis points per year with a $0 minimum balance. The second is the hybrid system. It comes with a 0.40% fee and a harsh $100,000 deposit requirement.

Ally Invest hasn’t quite caught onto the old-school service just yet. It does, however, provide a robo service for a 0.00% fee with a $100 starting balance.

Betterment looses again.

Other Services

Ally Invest has Roth, Traditional, SEP, and SIMPLE retirement plans. Betterment provides only three (Roth, Traditional, and SEP). Ally Bank, sister company of Ally Invest, offers several IRA’s with CD’s and savings accounts as investing options.

Ally Invest customers can sign up for traditional DRIP service at no cost. Betterment offers a slightly different approach, using dividends to buy more shares of ETF’s that haven’t performed well recently.

Betterment offers a service for automatic deposits that can be used for regular purchases of an account’s ETF’s. Although Ally Invest offers mutual funds, it fails to provide an automatic investing service for these products.

Overall, Ally seems to perform better here.

Our Recommendations

Since Ally Invest is the lone company here to provide mutual fund trading, it is our pick for this asset class.

For beginners, either broker-dealer is acceptable. With its autopilot service, Betterment would be a good choice. And with its customer support and educational materials, Ally Invest would be another good option.

As for long-term investing and retirement accounts, Ally seems like the better choice. Betterment doesn’t offer target-date funds, which Ally does supply.

Promotions

Ally Invest: Up to $3,500 cash bonus + 90 days of commission free trades (up to $500 in value).

Betterment: none right now.


Ally Invest vs Betterment - Judgment

Although Betterment was first, it comes in second in this survey.


Continue Reading