Ally vs. Schwab

On the surface, Ally and Schwab are very similar. The full-service brokerage firms each offer the ability to build an investment portfolio with the help of robo-advisors or financial planners. Both offer banking tools as well. What sets these two competing brokerage firms apart are their investment fee structures as well as additional tiers of service for high net worth investors.

A financial advisor can help you decide which brokerage offers the accounts and features you need to meet your long-term goals.

Overview of Ally vs. Schwab

Ally Invest is the trading and investment service of Ally Financial. The company was founded in 1919 by General Motors (GM) as General Motors Acceptance Corporation (GMAC). Its purpose at the time was to provide financing for GM vehicles. The company later entered other financial service sectors, such as insurance and mortgages. It re-branded as Ally Bank in 2009 (later, Ally Financial). In 2016, Ally acquired TradeKing, which was re-branded as Ally Invest.

Schwab, also known as Charles Schwab, unites a range of financial services under one roof. It has no trade or account minimums for its investment funds. Plus, Schwab clients can invest in actively and passively managed funds. In addition, investors can use a hi-tech robo-advisor tool to automate their investments.

Schwab recently acquired TD Ameritrade, enhancing its services for clients wanting to trade international currencies. By 2023, it will fully assimilate TD Ameritrade’s functions into its platform. Schwab currently manages about $8 trillion in customer assets.

Ally vs. Schwab: Trading Fees

The trading fees involved with a brokerage platform are one of the top considerations when selecting one. If you don’t pay attention to the fees upfront, you could get stuck with a fee structure that doesn’t work for your investment style.

Ally Fees

Most notably, Ally’s robo-advisor, called the Robo Portfolios, requires a $100 minimum to get started. You have two options when you work with the Robo Portfolios, cash-focused or market-focused. A cash-focused portfolio has no fees, but if you choose the market-driven option you’ll pay a 0.30% advisory fee. The robo-advisor takes your money goals and financial situation into account as it builds an investment portfolio for you. As your goals change, the robo-advisor will make adjustments to your asset allocation that correspond with your new objectives.

In terms of self-directed trading, you can make commission-free trades for U.S.-based stocks and options. You’ll pay $0.50 per online options contract and any securities under $2 face a $4.95 transaction fee. Ally does not charge fees for mutual fund transactions, although the funds themselves may charge a fee to buyers. . If you opt for the Wealth Management services, you’ll need at least $100,000 to get started and incur an advisory fee of0.85%.

Schwab Fees

The Schwab robo-advisors offering, Schwab Intelligent Portfolios, is available for free. But you’ll have the option to tap into a Premium service for a monthly fee of $30, which includes unlimited guidance from a Certified Financial Planner™ (CFP®). The Premium option also requires a $300 one-time planning fee.

When making trades on your own, trades on listed stocks and ETFs are free. But U.S. over-the-counter equities require $6.95 per trade. If trading options, you’ll pay $0.65 per contract. Broker-assisted trades tack on an extra $25. Wealth Advisory services are available to those with at least $500,000 to invest, with fees starting at 0.80%.

Ally vs. Schwab: Services and Features

Both Ally and Schwab offer 24/7 support. Plus, you’ll have the option to work with an advisor through either platform. When choosing between Ally and Schwab, here are the services and features that you’ll likely want to consider first.

Ally Services and Features

You need a minimum of $100 to get started with an Ally Invest Robo Portfolio. The full-service platform offers the ability to build your portfolio from a desktop or mobile device. This makes it extremely easy to adjust your investment strategy at any time.

When choosing self-directed trading, available account types include individual, joint, custodial, Traditional IRA, Roth IRA, Rollover IRA and Coverdell ESA. Wealth Management clients can also open a beneficiary Roth IRA or beneficiary IRA. If opting for the Robo Portfolios, available account types include individual, joint, Traditional IRA, Roth IRA and Rollover IRA.

Schwab Services and Features

If you want to work with Schwab’s robo-advisor, there’s no minimum account balance holding you back. Like Ally, Schwab offers a mobile and desktop version of the investment platform. But unlike Ally, Schwab clients can ask questions at a physical branch.

With Schwab, you can open a Roth IRA, Traditional IRA, Rollover IRA, Inherited IRA, Custodial IRA, Personal Choice Retirement Account, 529, Education Savings Account, Custodial Account, Individual 401(k), SEP-IRA, SIMPLE IRA, Personal Defined Benefit Plan, Business 401(k) Plan and Company Retirement Account.

Ally vs. Schwab: Online and Mobile Experience

Post-It notes reading "asset allocation," "cash," "bonds," "stocks," and "real estate."

Ally and Schwab each offer popular mobile banking apps. Each scored higher marks among Apple users. For Apple users, Schwab came out on top with a 4.8 out of 5-star rating. Ally has a 4.7 out of 5 stars. The tables turned for Android users. Ally came out slightly ahead with a 4.4 out of 5-star rating, while Schwab earned 2.7 out of 5 stars in the Google Play Store.

Ally vs. Schwab: Account Minimums and Accessibility

When comparing Ally and Schwab, one of the first things investors notice is how easy or difficult it is to get started.

Ally Invest has a relatively low barrier to entry. Its robo-advisor portfolios require just $100 to open an account, making it an approachable option for new investors who want to automate portfolio management without committing a large upfront investment. For self-directed accounts, Ally does not impose account minimums, allowing flexibility for investors who want to start small.

Schwab, on the other hand, takes a slightly different approach. Its Schwab Intelligent Portfolios robo-advisor has no minimum balance requirement, which makes it equally beginner-friendly on the automated side. However, Schwab’s advisory services aimed at wealth management come with much higher thresholds. For example, Schwab Private Client requires $1 million or more, depending on the service level.

This makes Schwab a better fit for experienced or higher-net-worth investors looking for more hands-on guidance, while Ally is a simpler entry point that facilitates investing for beginners.

If you’re brand new to investing and want to start with a modest amount, Ally is often the easier choice. But if you’re planning to grow into more sophisticated wealth management services down the line, Schwab provides a broader ladder of options.

Which Investment Firm Should You Choose?

With a more robust selection of account types, Schwab may be a better fit for investors seeking the benefits of a particular account. For example, if you are looking to open a more specialized account, like a self-employed retirement account, then Schwab likely offers what you need. Ally Invest offers an easy starting point with investment minimums as low as $100. Low fees, a robust robo-advisor option and 24/7 support may draw you in. But ultimately the right option is the one that works best with your unique situation.

Bottom Line

Investors reviewing portfolio performance.

Both Ally and Schwab offer top-notch investment tools. Schwab offers more account types, but the straightforward robo-advisor features make Ally worth a look as well. Ultimately, the right choice varies based on your specific needs as you build an investment portfolio. Those wanting to automate their asset allocation can consider working with a financial advisor instead.

Tips for Investing

Building an investment portfolio through a brokerage platform is possible. But sometimes, you need help from a professional to create the most appropriate portfolio for your goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
As you build out an investment portfolio, take advantage of SmartAsset’s free resources. For example, you can visualize your portfolio’s potential growth with our investment calculator.