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

About Ally Invest

Ally Invest (formerly known as TradeKing) might arouse suspicions of its legitimacy mainly because the discount online brokerage firm was founded in 2005 and it offers very low pricing. It is a relative newcomer in the world of online trading. Compared with early entries into online trading such as E*Trade (founded in 1991) or (founded in 1996), Ally Invest doesn't have quite as established track record. Being a privately held company instead of a public company like E*Trade or TD Ameritrade might also raise some uncertainty in customers' minds. However, Ally Invest is one of the 10 largest discount brokers in the United States with more than 500,000 total accounts and more than $3 billion in assets under management. Companies of that size and ranking in their industry rarely attain those levels by using questionable business practices or taking advantage of their customers.

Is Ally Invest Safe and Legitimate Firm?

No company is 100% safe. Businesses regularly fail or file for bankruptcy for all sorts of reasons. But Ally Invest has established itself as a reputable online broker, winning a slew of awards from entities such as Smart Money magazine, Barron's, and Consumer Reports.

Being a broker of all types of securities, Ally Invest is regulated and monitored by the Securities and Exchange Commission (SEC). The SEC's goal is to ensure that all publicly traded securities and the firms offering these securities adhere to the laws and rules governing the stock and bond markets.

The SEC's mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Their specific role as pertains to investors is to enforce fair trading rules and practices of brokers so investors have a fair and level playing field on which to compete with giant Wall Street investment banks, hedge funds, and corporate traders. One of the SEC's most important purposes is to guarantee that all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it.

Since Ally Invest also offers trading in commodities futures and foreign currency exchange, it is registered with the Commodities Futures Trading Commission (CFTC) and the National Futures Association NFA).

Ally Invest is a member of the Financial Industry Regulatory Agency (FINRA). This agency is "an independent, not-for-profit organization authorized by Congress to protect America's investors by making sure the securities industry operates fairly and honestly." This means member firms such as Ally Invest are willing to submit to scrutiny of their operations, comply with FINRA's rules, and promote market transparency and investor education. In this respect, Ally Invest is as safe and as legitimate as any other discount brokerage in the country.

New Client Promotion

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

Is Ally Invest a Scam?

Scam is a loaded term because one person's cry of "Scam" is another person's claim of "Buyers beware." Unscrupulous people are found in all businesses, and scams are certainly more prevalent where large sums of money are involved, such as investing.

Checking several online complaint-oriented websites showed that Ally Invest has received a few complaints from anonymous individuals, but overall it has a positive reputation with individual investors. We are 100% confident to say that Ally Invest is not a scam.

Is Ally Invest FDIC/SIPC Insured?

The quick answer is "yes and no," because investments serviced by Ally Invest are not insured by the FDIC. However, investor accounts are insured by the Securities Investor Protection Corporation (SIPC) up to $500,000 per account. This means that if Ally Invest were to go bankrupt or fail for some reason, SIPC guarantees each account up to that limit, with $250,000 of investors cash protected within that account. This is very similar to FDIC rules. What SIPC does not guarantee that any investment will generate a positive return, so investors are always at risk for a company they own stock in to fail and render their investment worthless.

Ally Invest Review: Website

Ally Invest BBB (Better Business Bureau) Rating

Ally Invest the Better Business Bureau (BBB) standing is solid with a B+ rating. In the past 3 years, 31 Ally Invest complaints have been closed with the BBB. Here's the breakdown:

- Advertising/Sales Issues - 2
- Billing/Collection Issues - 7
- Delivery Issues - 0
- Problems with Product/Service - 22
- Guarantee/Warranty issues - 0

Considering that the company has over half a million customers these numbers are actually great for Ally Invest.

Ally Invest Review

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

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Ally Invest Safety reviewed by Rating: 5