Ally Invest vs Vanguard


Compare Vanguard versus Ally Invest - which online investing firm is better in 2022? IRA/Roth accounts, cost, and stock broker mutual fund offerings.


Ally Invest vs. Vanguard Introduction


Vanguard pioneered fund investing with low expense ratios, but is that enough now to defeat rival brokerage firms in the quest for client business? Ally Invest may have better financial solutions today. Let’s take a look.


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Ally Invest $0 $9.95 $0.50 per contract $0 $0
Vanguard $0 $20 $1.00 per contract $20* $20*


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest
Vanguard


Promotions


Ally Invest: Up to $3,000 cash bonus + $0 commission trades.

Vanguard: does not offer promotions.



Investing Styles


Vanguard customers can choose between self-directed and managed accounts. The broker-dealer provides both robo and old-school services. The cheapest option in the managed account category is the robo program. It costs just 15 basis points per year.

Self-directed accounts at Vanguard have no fees (with enrollment in e-statements). They offer trading in:

- Stocks
- Option contracts
- Bonds
- Mutual funds
- Exchange-traded funds
- Closed-end funds

Ally Invest also offers investment-advisory services, although only in robo format. It does not have any human advisors at any price. Its automated investing program costs 30 basis points per year. Customers who agree to hold a large position as cash get the service for free.

Self-directed clients at Ally Invest can buy and sell these financial instruments:

- Options
- Stocks
- Fixed income
- ETF’s
- Closed-end funds
- Mutual funds
- Forex (a separate account is required)

Winner: Pretty even


Margin Accounts


Both firms in this contest offer margin accounts. Ally Invest is very competitive with its rates:

9.25% for loans below $10k
4.75% for loans above $1m

Vanguard’s rates are higher:

10% for loans below $25k
6.25% for loans above $1m

Winner: Ally Invest


Website Trading


Vanguard has constructed a basic website. There is no web-based platform within it, and there aren’t many advanced tools to speak of. For example, there is no trade bar on the site.


Vanguard or Ally


Charts don’t have full-screen capability on the Vanguard site, although there are a few tools such as comparisons and technical studies (just a handful). There are no option tools to comment on, although the broker does provide chains for calls and puts with links to trade contracts.

The broker’s trade ticket has just 4 order types (stop limit being the most advanced) with zero advanced qualifiers. We did like a Trade help link on the ticket. It provides important information about order entry.

Over at Ally Invest, traders can choose between a basic website and a slightly more advanced desktop platform. Called LIVE, this piece of software delivers full-screen charting, advanced option tools, and multi-leg security trades.


Ally vs Vanguard


Ally Invest’s website itself does a pretty good job, delivering a trade bar at the bottom of the screen for order entry. The ticket has stop and market-on-close orders with an AON (all or none) qualifier. The site hosts other useful resources, such as market news and a suite of derivative tools.

Winner: Ally Invest


Desktop Software


Ally Invest clients who place at least 30 trades per quarter can use Quotestream (review), a desktop trading system. The program functions on both Windows and Mac and delivers many good features. Highlights include:


Ally or Vanguard


- Watchlist
- Heatmap
- Time & sales data
- Waterfall ticker
- Very advanced charting
- Equity screener
- Integrated option spreads
- Earnings calendar

Vanguard does not have any desktop software.

Winner: Ally Invest


Mobile Apps


Although Vanguard failed to deliver anything in the desktop category, it does come through here. Its mobile app is compatible with Apple and Android devices and offers the following features:


Vanguard or Ally


- Trading in mutual funds (Vanguard brand only for some odd reason)
- Mobile check deposit
- Order ticket (same as the website version)
- Watchlist (independent of the website watchlist)
- News and educational articles
- Account details such as order status
- Secondary app called Beacon delivers a more simplified trading experience

Vanguard’s two apps combined fail to deliver charting of any kind, a glaring weakness.

The Ally Invest mobile app does have charts. They come with several tools, such as technical indicators and a comparison widget. Plus, they can be rotated. Other mobile highlights include:


Ally versus Vanguard


- Watchlist that syncs with the Ally Invest website
- Option chains for calls and puts
- Trade ticket (somewhat more simple than its website cousin)
- Bill pay
- Zelle transfers
- Mobile check deposit
- ATM locator
- Link to Ally Bank accounts
- Second app for forex trading

Winner: Ally Invest


Education and Research


Vanguard provides lots of articles and videos on many investment topics, and these can help both customers and guests alike. Its videos are mostly on YouTube (and not on the Vanguard site), while the articles can be found under the educational tabs on its site. At times, we had difficulty navigating these sections because they’re not laid out very intuitively.


Vanguard vs Ally


Ally Invest also has learning materials in both article and video formats. These resources are actually mixed in with Ally Bank, and it can be hard to find them because they are either on the Ally Bank site or the bank’s YouTube channel (Ally Invest doesn’t have one). Most of Ally’s resources concentrate on banking, although there are some investment materials.

Winner: Vanguard


Additional Services


Cash Management Features: Ally Invest customers can open Ally Bank accounts and easily connect them to brokerage accounts for quick funds transfers. Vanguard no longer provides any type of banking tools.

DRIP: Both firms offer dividend reinvesting for ETF’s and equities at no cost.

Fractional Shares: Neither broker-dealer in this competition provides whole-dollar investing (in stocks and exchange-traded funds).

Extended Hours: Vanguard customers can trade securities after the closing bell. Ally Invest customers can trade after the closing bell and before the opening bell.

Initial Public Offerings: Neither firm has early access to IPO’s.

Individual Retirement Accounts: Ally Invest offers personal IRA’s, while Vanguard has both personal and small business accounts.

Periodic Mutual Fund Investing: Available only at Vanguard (for Vanguard funds).

Winner: Draw


Our Recommendations


Long-Term Investors and Retirement Savers: With old-fashioned human advisors, self-employed 401k’s, and target-date funds with neither loads nor transaction fees, Vanguard gets our stamp of approval.

ETF & Stock Trading: Ally Invest has better software. Vanguard funds can also be traded there.

Beginners: Either robo account in this contest is a good choice for beginning investors. For self-directed trading, it’s pretty even as well.

Mutual Fund Trading: Vanguard has 6,592 mutual funds, while Ally Invest offers 10,282. However, none on Ally’s list are no-load, no-transaction-fee funds. Vanguard, by comparison, has over 3,000 of them. We would go with Vanguard.

Small Accounts: Vanguard still maintains a few policies that benefit large accounts, so we have to recommend Ally Invest.


Promotions


Ally Invest: Up to $3,000 cash bonus + $0 commission trades.

Vanguard: does not offer promotions.



Ally Invest vs Vanguard: Results


Ally Invest does in fact outperform Vanguard in some categories, but Vanguard remains very strong in the realms of investment advice and retirement planning.




About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.