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

Overview of Wealthfront and Ally Invest

If you’re thinking about opening a Wealthfront account for its robo-advisory service, you should take a look at some of the company’s rivals. What you find may surprise you.

Range of Investments

Ally Invest provides trading in stocks, options, fixed-income instruments, mutual funds, closed-end funds, ETF’s, and forex.

Wealthfront is a robo-only advisor. As a result, the only type of investment available is low-cost ETF’s.

Ally Invest easily wins the first category.

Promotions

Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

Wealthfront: none right now.


Financial Education and Research

Since Wealthfront is an automated-only investing firm, it doesn’t offer a lot of information on individual assets. The company’s website has no security screeners or any amount of investment education other than a few articles and videos on its approach to robo investing.

Ally Invest’s site delivers many educational materials. There are articles and some videos on a broad range of financial topics. These include investing in a down market, personal finance, and the basics of index mutual funds.

The broker’s stock screener is able to look for investments based on dividend yield, price performance, market cap, sector, price-to-tangible book ratio, chart patterns, and many other variables.

Ally Invest is the outperformer here.

Trading Technology

With its automated approach to investment management, Wealthfront has no emphasis on self-directed trading technology. Its website lacks a trading platform, trade bar, and many other resources that can typically be found at most online self-directed brokerage firms. The company does provide some portfolio analysis tools. They are not trading tools, however.





Ally Invest has a trade bar that is capable of delivering real-time information on securities, such as volume and trade price. Trades can be placed directly from the tool. The website itself offers many useful trading features, including alerts, charting, a watchlist, and more.


Ally Live


A browser platform offers better charting (with more than 100 technical indicators), a market clock, advanced option tools, and the ability to trade bonds and mutual funds. Market indices are displayed along with order status. The trade ticket delivers multiple order types and duration choices. Missing is direct-access routing and Level II data.

Ally is the obvious winner in this category.

Mobile Apps

The Wealthfront mobile app delivers about the same experience as its website. That is to say there’s not much on it. We did find a cash transfer tool and an alerts feature.

Moving over to Ally Invest, the situation improves dramatically. There is mobile check deposit, and Zelle transfers (in addition to ACH transfers). We also found option trading, although not mutual fund trading.


Ally vs Betterment


Other highlights of Ally’s app includes good charting with horizontal viewing, a few technical studies, the ability to compare to other stocks or indexes, and a timeframe going back 3 decades.

Another victory for Ally Invest.

Portfolio Management

Wealthfront was established as a robo advisor. It offers a software program that buys and sells exchange-traded funds with low expense ratios. This service costs 0.25% annually. The company requires $500 to enroll. Old school packages are not available.

Although Ally Invest offers self-directed accounts and services, as we have seen, it also has a robo program. It costs 0.30% with a $100 minimum. As with Wealthfront, traditional advice is not offered.

Most investors can put up $500, so Wealthfront wins this category.

Other Services

Ally Invest clients can open a variety of IRA’s, including SEP and SIMPLE plans. Ally Invest’s affiliate, All Bank, offers bank IRA’s with FDIC insurance. Wealthfront offers brokerage IRA’s (minus the SIPMLE plan). For education accounts, Ally provides the Coverdell plan; while Wealthfront has a 529 plan.

Dividends can be reinvested in whatever security pays them at Ally Invest. Wealthfront’s robot takes dividends and reinvests them in underperforming funds.

Automatic investing of mutual funds isn’t available at either firm.

Ally has a slight edge here.

Our Recommendations

Because Ally is the only broker to offer mutual funds, it’s the obvious pick in this area.

For new investors, either company would be a good choice. Wealthfront does virtually all of the work, while Ally Invest provides good customer service and plenty of learning resources.

For retirement savings and long-term investing, we propose Ally Invest, who offers target-date mutual funds.

For stocks, Ally Invest is the only available choice. For ETF’s, we suggest Ally over Wealthfront because the latter firm only offers a small selection.

Promotions

Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

Wealthfront: none right now.


Ally Invest vs Wealthfront - Judgment

Robo-only brokerage firms like Wealthfront have been matched and beaten by other firms that have added digital-advisory services. Ally Invest has a computer algorithm and much more, making it the overall better pick.


Continue Reading