Ally Cash-Enhanced Managed Portfolio Review
Ally Cash-Enhanced Managed Portfolio offers automated investing with no advisory fees. But what's the catch? Read on to find out how it compares to other top robo-advisors.
Automated Investing to Help Save Your Time | |||
Overall Score | 4.4 | ||
Annual Fee | 5.0 | ||
Minimum Deposit | 4.5 | ||
Human Advisors | 3.0 | ||
Customer Service | 5.0 | ||
Pros and Cons
- No advisory fees for Cash-Enhanced Managed Portfolio
- Good customer service
- Preview your strategy before signing up
- No tax loss harvesting
- Large cash buffer
Bottom Line
Solid robo-advisor with great customer service if you have $100 to start
- How Ally Cash-Enhanced Managed Portfolios Work
- Who It's Best For
- Fees
- Portfolio Options
- Getting Started
- Platform & App
- Why We Like
- Downsides
- How It Compares
How Cash-Enhanced Managed Portfolios Work
Cash-Enhanced Managed Portfolio has no annual advisory fee. The minimum to open an account is only $100.
Based on your goals and risk profile, Ally will create the best portfolio for you. Each portfolio is comprised of about 9 ETFs from 5 different asset classes.
- US Stocks
- International Stocks
- US Bonds
- International Bonds
- Cash
Your portfolio will be made up of 30% cash . This cash is set aside and earns the same interest as Ally Online Savings. It's meant to act as a buffer to balance out potential risk should market conditions change. As your investments grows, Ally will continue to rebalance your portfolio so it always remains at 30% cash.
You will not be able to access this cash like a traditional savings account.
Who Is It Best For?
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Ally Invest Cash-Enhanced Managed Portfolios would benefit anyone who wants professional investment guidance without the hefty advisor fees. Those who benefit the most include:
- Beginning investors who don't understand how to invest
- Investors who are too busy to manage their portfolios
- Current Ally Bank or Ally Invest customers
Cash-Enhanced Managed Portfolio offers options for many types of investors. Whether you want to open a taxable account, IRA, or a custodial account, Ally has you covered. This opens up the possibilities for investors of any magnitude, whether saving for a short-term goal or retirement.
They also provide supplemental insurance through Lloyd's of London for investors who have more than $500,000 invested with Ally Invest. This coverage is also strictly if Ally goes out of business and your investments are lost.
What Are the Fees?
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Cash-Enhanced Managed Portfolios charges no advisory fees for your assets under management.
This includes:
- No annual charges
- No trading fees
- No transfer or transaction fees
- No rebalancing fees
Sounds too good to be true? The catch is that 30% of your portfolio will be in cash. This is how Ally earns money and can provide Cash-Enhanced Managed Portfolio free of advisory fees.
Portfolio Options
You have 4 portfolios to choose from:
Core:
Diversified across domestic, international and fixed-income assets. You can choose your risk level - from conservative to aggressive.
Income:
Designed to generate investment income through dividends. It's more conservative so it's ideal if you are currently near or in retirement.
Tax optimized:
Designed to maximize your earnings if you make after-tax contributions to an IRA. It's best for investors in higher tax brackets.
Socially responsible:
Only invests in businesses that actively practice sustainability, energy efficiency, or other environmentally-friendly initiatives.
Getting Started
Getting started takes just a few minutes. You answer 5 basic questions that help Ally determine your risk level. They then create an investment strategy for you. If you choose to accept it, you open up an account and fund it with a linked checking or savings account.
Ally Cash-Enhanced Managed Portfolio's software then monitors your investments and rebalances them as things change. It's totally hands-off for you. You don't have to worry about trading and managing your own portfolio.
- Individual and Joint Taxable
- Traditional and Roth IRAs
- Rollover IRA
- Custodial
The Platform and App
Ally Invest Cash-Enhanced Managed Portfolio' platform is basic. It's certainly not a standout point for this robo-advisor. The same is true for their mobile app, mostly because they don't have one specifically for automated portfolios.
Reasons We Like Ally Invest
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- Good customer service. Sometimes it's hard to find good customer service with a robo-advisor. Some companies live up to the "robo" part of the name and only offer support online. Ally Cash-Enhanced Managed Portfolio takes it a step further by offering phone and online chat support to help you when you need it.
- Seamlessly integration for Ally Bank customers. For existing Ally Bank customers, you have one dashboard for everything. You can log into one account and view all of your investments and deposit accounts in one place.
Transferring funds is also easy and instant. You don't have to wait the typical waiting period for funds to be available either to invest or after withdrawing.
- Customize your portfolio. While Cash-Enhanced Managed Portfolio does recommend a specific portfolio based on your risk tolerance, you can customize it. You are free to play with the allocations until you find the right balance between risk and return to help you reach your goals.
- Automatic rebalancing. The market changes often, and your portfolio could get knocked off target with those changes. When that happens, Ally automatically rebalances your allocations to get you back on track to meeting your goals.
- Completely hands-off. If investing overwhelms you or you don't have the time to manage your portfolios, Ally Invest Cash-Enhanced Managed Portfolio does the work for you. Once you set your portfolio, you sit back and let them do the work while you watch your portfolio grow.
- Diversified portfolio. With 9 ETFs in 5 asset classes to choose from, you can diversify your risk and lower your chances of loss. Without all of your eggs in one basket, you lower the risk of experiencing a total loss when one sector of the economy suffers.
- Preview before signing up. You answer Ally's basic questionnaire and let them put a portfolio together before you enter any personal information. This gives you a chance to decide if Ally is right for you before ever signing up.
Reasons You May Want to Look Elsewhere
- No tax loss harvesting. Tax loss harvesting helps minimize your tax liability while offsetting your capital gains with losses. This isn't a service that Ally offers, but one that several other robo-advisors do offer. If taxes are of a concern to you, Ally may not be the right option.
- Large cash buffer. The 30% cash allocation is high. While you do earn interest on it, you may not get as good of a return as investing. Some people may not want this extra cash sitting around uninvested.
- No human advisors. There is no access to human advisors if you need more personalized advice or customization.
How It Compares
Ally Invest vs Betterment:
Betterment was one of the first robo-advisors. It also invests in low-cost ETFs and automatically rebalances your account.
Betterment charges 0.25% annual fee, so you would have to pay to use the service. However, it offer tax loss harvesting and a bigger variety of portfolio options, which could give them the edge over Ally.
Another possible advantage is that investors with over $100k can choose to upgrade the plan to include unlimited access to human advisors.
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 |  | |
Ally Cash-Enhanced Managed Portfolio | Betterment | |
|---|---|---|
Automated Investing to Help Save Your Time - | Get up to 1 Year Managed Free - | |
Benefits and Features | ||
| Annual Fee | 0% advisory fee for Cash-Enhanced Managed Portfolio | 0.25% for accounts under $100,000; 0.40% for accounts $100,000+ |
| Minimum Deposit | ||
| Phone Support | ||
| Live Chat Support | ||
| Email Support | ||
| Human Advisors | ||
| Robo Advisor |  | |
| Assets Under Management | ||
| Tax Loss Harvesting | ||
| Goal Tracker | ||
| Automatic Deposits | ||
| Online Platform | ||
| iPhone App | ||
| Android App | ||
| Mobile App | ||
| Fractional Shares | ||
| Taxable Accounts | ||
| 401k Plans | ||
| IRA Accounts | ||
| Roth IRA Accounts | ||
| SEP IRA Accounts | ||
| Trust Accounts | ||
| 529 Plans | ||
| | |
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Ally Cash-Enhanced Managed Portfolio: Pricing information from published website as of 09/18/2019 Betterment: Pricing information from published website as of 04/04/2018 | ||
Ally Invest Managed vs Self-Directed
If you prefer to manage your own investments, including buying, selling, and deciding when the time is right, Ally Invest Self-Directed is a better option.
The trading fees are some of the lowest in the industry. And the trading platform is robust and user-friendly. As an extra incentive, all new accounts will receive 90 days of free trades, up to $500 in value.
 | ||
| | |
Ally Cash-Enhanced Managed Portfolio | Ally Invest | |
|---|---|---|
Automated Investing to Help Save Your Time - | Get Up to $3,500 - | |
Benefits and Features | ||
| Minimum Deposit | ||
| Stock Trading | ||
| Options Trading | ||
| | |
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Ally Cash-Enhanced Managed Portfolio: Pricing information from published website as of 09/18/2019 Ally Invest: Pricing information from published website as of 07/18/2019. | ||
Ally Invest vs Wealthfront
Wealthfront is another frontrunner when it comes to robo-advisors. Wealthfront offers more diversified asset classes that include real estate and natural resources. It also offers tax loss harvesting to all clients, and more advanced strategies for those with $100k+.
Wealthfront also offers free advanced financial planning tools to help you stay on track with your goals. This includes retirement, mortgage, and education calculators.
Ally Cash-Enhanced Managed Portfolio | Wealthfront | |
|---|---|---|
Automated Investing to Help Save Your Time - | ||
Benefits and Features | ||
| Annual Fee | 0% advisory fee for Cash-Enhanced Managed Portfolio | |
| Minimum Deposit | ||
| Phone Support | ||
| Live Chat Support | ||
| Email Support | ||
| Human Advisors | ||
| Robo Advisor | | |
| Assets Under Management | ||
| Tax Loss Harvesting | ||
| Goal Tracker | ||
| Automatic Deposits | ||
| Online Platform | ||
| iPhone App | ||
| Android App | ||
| Mobile App | ||
| Fractional Shares | ||
| Taxable Accounts | ||
| 401k Plans | ||
| IRA Accounts | ||
| Roth IRA Accounts | ||
| SEP IRA Accounts | ||
| Trust Accounts | ||
| 529 Plans | ||
| | |
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Ally Cash-Enhanced Managed Portfolio: Pricing information from published website as of 09/18/2019 Wealthfront: Pricing information from published website as of 04/04/2018 | ||
Bottom Line
It's hard to beat the 0% advisory fee offered by Ally Invest Cash-Enhanced Managed Portfolio. And with the low $100 minimum, this makes it great for those who want to try a robo-advisor without committing too much money. It's also good for existing Ally customers who to try the service.
There are downsides though, such as the lack of tax loss harvesting and high cash percentage. If these don't sit well with you, there are many options out there. Make sure you weigh the pros and cons of each before choosing the robo-advisor that is right for you.
Write to Kim P at daniela@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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