Ally Invest, the online brokerage and wealth management arm of Ally Financial, announced Wednesday that it is offering new “freemium” managed and self-directed investment plans.
For do-it-youselfers, Ally Invest is offering 90 days of commission-free trading and over 500 commission-free, “top brand-name” ETFs including ones from Vanguard, Global X, Charles Schwab and iShares. The move gives investors the ability to “try-before-you-buy, without commitments” until they are ready to be “more fully invested” with Ally, the company said in a statement. A company spokeswoman said that after the 90-day period elapses, trades would cost $4.95 apiece.
The Charlotte, N.C.-based firm said its managed portfolios, which are a robo offering, have no advisory fees and an entry point of $100. Like the firm’s other robo offering, the managed portfolios are ETF-based, but instead of being entirely invested, include a 30% allocation to cash. The yield on the cash will be 1.9%.
Investors who do not want a cash buffer in their robo will continue to have access to Ally Invest's automated managed portfolio for an annual advisory fee of 0.30%.
In a recent survey the firm conducted, 75% of Americans view investing as stressful, but when a portion of that is in cash, over 80% say they feel a greater sense of comfort.
"Like all consumers today, investors are craving easy, let-me-try-it-first experiences," Ally Invest President Lule Demmissie said. "Our new offerings satisfy that desire to explore and see for themselves why investing is, indeed, a needed, wise, and beneficial path to building financial wealth. What we are doing at Ally is removing barriers so everyone has access to the opportunity to build wealth. Once the client feels comfortable, they have the choice to upgrade from those free services to others for a fee."
"This freemium approach is designed to help build the confidence to 'try it out,' whether you want to have us invest the money for you or you want to do it yourself," added Diane Morais, president of Consumer & Commercial Banking Products for Ally Bank. "While some barriers to investing may persist for people, Ally won't be one of those friction points."