Is Ally Invest a Scam? Is Ally Invest a Safe, Legitimate and Insured Brokerage Firm? Ally Invest BBB Rating in 2021


If you’re thinking about opening a brokerage account with Ally Invest, but have questions about its safety and reliability, keep reading. We’ve checked the background of this company, and we have all the details you need to know.

Is Ally Invest FDIC Insured?

Ally Invest is not a bank. It is a broker-dealer. Thus, it is not eligible for the FDIC program; nor is any other brokerage firm. The FDIC only insures banks.

Is Ally Invest SIPC Insured?

Yes, Ally Invest is a member of SIPC. This means that every brokerage account with the firm is protected up to $500,000, half of which can be for cash. SIPC is mandated by Congress, and it is responsible for guaranteeing the number of shares of securities in investment accounts.

Note that SIPC does not guarantee share price. Let’s say you have 50 shares of General Motors in your account. SIPC promises that in the event the broker holding the shares (in this case, Ally Invest) files for bankruptcy, your shares will be returned to you. If the share price on the stock market goes to $0, there is no guarantee at all.

Additional Insurance: To provide additional protection for large accounts that have more than $500,000 in assets, Ally Invest offers supplemental insurance through Lloyd’s of London and some other British underwriters. The maximum this extra policy will cover is $37.5 million per account, with a cap of $900,000 per account for cash. While these numbers may seem very generous, the policy does have an aggregate brokerage house limit of $150 million.

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Is Ally Invest Safe and Legitimate Firm?

Ally Invest Securities is a member of FINRA and the SEC. Its FINRA I.D. # is 136131, and its SEC # is 8-66982. Registration does not imply any guaranteed result, but it does mean that regulatory bodies are responsible for overseeing the conduct of Ally Invest and ensuring it operates in a legal and ethical fashion.

Ally Invest Advisors is the advisory arm of Ally Invest. It has a separate registration (FINRA # 170301 and SEC # 801-79305).

Is Ally Invest Safe

What Clearing Firm Does Ally Invest Use?

Ally uses Apex Clearing Corporation as its clearing firm. Apex is also registered as a broker-dealer with both FINRA and the SEC. Moreover, Apex is registered with several exchanges, including the Chicago Board Options Exchange and the New York Stock Exchange. Many brokerage firms use Apex as their clearing firm.

What is the Financial Strength of Ally Invest?

Ally Invest is owned by Ally Financial, Inc., a financial conglomerate. Besides its brokerage business, Ally also operates a bank that offers checking and savings accounts. Auto loans and mortgages are also profit-generating lines of business.

If we look at the numbers, we will see that Ally is a well-heeled group. In its most recent annual report, Ally reports over $1 billion in revenue from a growing auto insurance division. The company has over $170 billion in client assets. This amount includes over $100 billion just from the banking division. And these numbers reflect increases from prior calculations; so the company is growing.

The brokerage division stands at around $13.4 billion in client assets.

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Ally Invest BBB (Better Business Bureau) Rating

Ally Invest has a profile at the Better Business Bureau. BBB grades the company an A, which is the second highest possible rating. Issues that BBB analyzes for issuing such a high grade include a company’s complaint history, the amount of time in business, how transparent BBB views the company, government actions taken or not taken against a company, and any advertising issues BBB is aware of.

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Ally Invest Review

For more information about the company's online trading accounts, take a look at Ally Invest Review.

Is Ally Invest Scam Judgment

Ally Invest is as safe as any other brokerage firm out there. As pointed out above, no securities regulator insures the market price of a security. Anytime you invest in the securities markets, there is a level of risk that is not avoidable. Nevertheless, many protections are in place at Ally Invest to make the investing experience as safe as possible.