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Written by Edward Canty on May 20, 2020
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Personal Capital vs Ally Invest 2020: Best Managed Portfolio Option?

Personal Capital vs Ally Invest 2020

Ally Invest and Personal Capital are two investing and financial planning platforms that compete with numerous similarities.  

Personal Capital has developed a platform that combines a traditional financial advisor with robo-advisor qualities. You can get access to a human financial planner and have full-scale investment management with Personal Capital. 

Ally Invest is known for its low brokerage fees. Ally charges zero commissions for trading stocks, options, and ETFs. Now, Ally Invest has released a robo-advisor feature called Managed Portfolios, which will choose and manage your investments for you. 

Both the platforms can help investors build portfolios and invest across asset classes. It depends on the investor’s financial goals and expertise for which app is best for them. 

Try Personal Capital's Free Financial Plannning Tools

Here are a few key differences between Personal Capital and Ally Invest:

  • Investment Options
  • Financial Planning Tools and Features
  • Investment Strategy
  • Access to human advisors
  • Commission and Fees Charged
  • Account Types

Summary: Personal Capital vs Ally Invest 

  • Personal Capital offers free financial planning and budgeting tools.
  • Ally Invest allows you to invest in stocks, bonds, options, mutual funds, forex, and ETFs.
  • Personal Capital offers full scale investment management using stocks, bonds, and ETFs starting at an annual fee of 0.89%. 
  • Ally Invest offers Managed Portfolios which offers investment management starting at a 0.30% fee (free if using the Cash Enhanced portfolio) and a $100 minimum account balance.
  • There is a Zero minimum balance for Ally Invest and a $100 minimum for Ally Invest Managed Portfolios. 
  • Personal Capital minimum for financial planning and investment management is $100,000.
  • Ally Invest charges a fee of $9.95 per trade for no-load mutual funds.
  • Personal Capital allows you to sync external accounts and gives you a birds eye view of your finances and net worth. 
  • Ally Invest caters to the do-it-yourself investor who is comfortable building their own portfolio and doing their own financial planning. 
  • Personal Capital is a platform that caters to the investor who has slightly more investable assets and those who aren’t comfortable making their own investment decisions. 
FeaturePersonal CapitalAlly Invest
Minimum Investment$100,000$0 For Self Directed, $100 For Managed Portfolios
FeesFree Investing Tools, Portfolio Fees Start At 0.89% AnnuallySelf Managed Commission Free, Managed Portfolio 0.30% Annually
Access To Financial AdvisorsYesNo
Free Financial Planning ToolsYesNo
Investment OptionsPortfolios OnlySelf Directed (Stocks, ETFs, Bonds, Forex, Options, Mutual Funds) Or Managed Portfolios
Best ForHigh Net Worth Investors ($100,000+) Or Those Looking For Free Financial Planning ToolsSelf Directed Investors Or Those Looking For Passive Portfolio Management

Click Here To Invest With Personal Capital!

What Is Personal Capital?

Personal Capital is an up and coming platform that helps you manage your finances. Nearly 2 million people use the Personal Capital platform to manage their finances.

Personal Capital has two versions to facilitate its users:

  1. Free Financial Dashboard - Personal Capital users can link accounts, access budgeting, and use financial planning tools all for free. 
  2. Wealth Management - Personal Capital offers access to human financial advisors and investment management starting at a fee of 0.89% and a minimum of $100,000. 

Most users start out with the free version, but 18,000 clients have more than $8 billion in assets under management with Personal Capital.

How Does Personal Capital Work?

First, you need to open an account with Personal Capital.

To get started with Personal Capital, you can begin to link all your external financial accounts in the software, including IRAs, mortgage, credit cards, 401ks, savings, and checking accounts. 

Once you connect all the accounts, Personal Capital will provide a comprehensive view of your current financial situation.

Personal Capital Wealth Management offers in-depth insights into your financial plan and full-scale investment management. 

Personal Capital Features

There are two versions of the app, and every version has distinct functions. Here, you can find the details of the free version.

Free Financial Planning Tools

There is a misconception that the free version of Personal Capital aids budgeting, but it has more features related to investing your money in the right securities.

This free version has the following features:

  • Dashboard: Sync all your accounts on a single platform including historical data. You can include savings accounts, loans, outside brokerage accounts, credit cards, and checking accounts. You can also add some employer-sponsored retirement plans. 
  • Budgeting: This tool tracks your income and expenses and makes a customized budget plan for you. 
  • Cash Flow Analyzer: Here, you can analyze your spending and track your cash flow. The app sends monthly summaries, including transaction details and spending categories.
  • 401(k) Analyzer: The Personal Capital app can detect costly fees within your 401(k) plan. 
  • Retirement Planner: You can set retirement goals and track your progress to see if you are making the right money decisions. 
  • Investment Checkup: With this tool, the user can view their current asset allocation and fees. 
  • Net-Worth Calculator: This tool tracks your assets and liabilities and calculates your net worth.

Personal Capital Wealth Management 

This tier gives your access to human financial advisors as well as full scale investment management. The minimum account balance to get started is $100,000 and fees start at 0.89% annually. 

Access To Human Financial Advisors

Personal Capital has a team of skilled investment advisors and financial planners. Therefore, you can contact them and discuss your financial goals, risk tolerance, and return expectations, etc. Accordingly, they can assist you with your customized financial plan. 

Personal Capital Investment Strategy

The investment strategy of Personal Capital is based on factors such as:

  • Asset Allocation: The app keeps track of the past and present performance of different assets classes. As a result, Personal Capital will choose an asset allocation appropriate for the specific investor. 
  • Portfolio Diversification: Personal Capital believes in diversification of a portfolio across a mix of different securities. Using the efficient frontier hypothesis Personal Capital aims to optimize diversification within each portfolio. 
  • Tax Optimization: Personal Capital can use tax optimization strategies within your investment portfolio to enhance portfolio performance. 

Personal Capital Savings Account

The platform offers a savings account with an Annual Percentage Yield (APY) higher than most banks. The Personal Capital Savings Account has no minimum balance and up to $100,000 per day in withdrawals.

The user can open a savings account through the Personal Capital website by providing their email and phone number. After that, he can fill general information and link all external financial accounts to have access to a free version of Personal Capital.

Personal Capital Fees

The Free Financial Dashboard is free to use. The company earns selling advisory services to a limited number of clients who hold over $1 million of assets. 

The Wealth Management Service charges a fee based on the assets under management:

  • 0.89% on $1 Million
  • 0.79 % on the first $3 Million
  • 0.69 % on the next $4 Million
  • 0.59 % on the next $5 Million
  • 0.49 % over $10 Million

Personal Capital Pros

  • Free financial planning tools, better than other free tools out there.
  • Full-scale investment management using asset allocation and portfolio diversification.
  • Access to human financial advisors.
  • Tax optimization and tax loss harvesting features.

Click Here To Invest With Personal Capital!

Personal Capital Cons

  • The Personal Capital Wealth Management platform charges higher fees starting at 0.89% annually and is based on the assets under management. 
  • The minimum for Wealth Management is $100,000.
  • Budgeting tools could be better on the free platform.

What Is Ally Invest?

Ally Invest caters to both beginners and advanced investors due to its zero commission trading and low annual fees. There are two primary offerings on the Ally Invest platform:

  1. Self-Directed Trading - Users can trade a variety of stocks, bonds, ETFs, options, Forex, and mutual funds all with a $0 account minimum. Stocks, ETFs, and options have $0 trading commissions. 
  2. Managed Portfolios - With a $100 account minimum users can access Ally Invest Managed Portfolios. These are prebuilt investment portfolios which will come at a 0.30% annual fee (though there are ways to waive this fee as well). Managed portfolios are built using 17 different ETFs covering a variety of assets, sectors, and geographies. 

It hardly takes 10 minutes to make an account on Ally Invest. First, you’ll need to share your investment goals, and the software will line up a diverse mix of ETFs for you.

Second, you can customize your investment portfolio by setting the risk tolerance and expected return. Lastly, you just need $100 to start investing. You can track the progress of your portfolio from your mobile phone or web app. 

Ally Invest Features

Ally Invest becomes the first choice of the investor due to its no advisory fees, minimum $100 starting investment, and customer support service. The Ally platform has a number of features under both its Managed Portfolios and Self Directed services. 

Ally Managed Portfolios

Ally Invest offers managed portfolios which are prebuilt investment portfolios that users can access. By answering a variety of questions about risk aversion, time horizon, and investment goals, Ally Invest will recommend a managed portfolio that will fit the user’s needs. These portfolios are automatically rebalanced and use a variety of 17 ETFs to create each portfolio. 

Fees For Ally Managed Portfolios 

Legacy Portfolio: There is an annual fee of 0.30% for investing in Ally Invest Managed Portfolios. 

Free Version: Using Ally Managed Portfolios Cash Enhanced feature you can get the 0.30% annual management fee waived. However, 30% of your portfolio will be invested in an interest bearing cash account. 

Expense Ratios: The fund expense ratios in the underlying ETFs range from 0.11% to 0.17% annually. 

Ally Managed Portfolio Account Types

  • Regular Taxable
  • Joint Taxable
  • Traditional IRA
  • Roth IRA
  • Rollover IRA

Self-Directed Investments Available 

Unlike other service providers, Ally has vast investing options for the users to select from.

  • Stocks: (commission-free)
  • ETFs: (commission-free)
  • Options: (commission-free)
  • Bonds: $1 trading fee per bond
  • Mutual Funds: Trading fees are $9.95 per mutual fund buy or sell for no-load funds

Research and Data

Ally Invest provides the following tools for the self-directed brokerage service:

  • Real-Time Charts: The chart reflects the performance of stocks, indices, and ETFs with 90 visualization options. The user can customize their charts accordingly.
  • Profit-Loss Calculator: This tool forecasts the potential profit or loss for an options trade. 
  • Watchlist: It tracks the performance of your favorite funds and equities. With the help of this tool, you can keep an eye on specific funds and stocks.
  • Market Data and Snapshot: You can look at a company’s historical performance and up to date key financial data.
  • Probability Calculator: It assesses the risk of your portfolio and predicts the return against given your total risk. 

FOREX Trading Platform

There is a separate account for currency (Forex) and future trading on the site. The minimum balance required to open the account is $250, but Ally Invest suggests the investor has at least $2,500 to utilize the services of Ally Invest fully.

Ally Invest does not charge any hidden commission or fee on a currency trade. So, if you are a beginner, do not hesitate to invest through Ally Invest to get an exceptional experience. 

There are more than 50 currency pairs on the Forex platform, along with other options, including gold, silver, and commodities. Further, the trading platform assists the user with more than 100 technical indicators. 

Moreover, the trading commission varies depending upon the volume and other factors, but the lowest cost is $0.45 per contract. Just like options trading, Forex trading is for advanced investors only.

Ally Invest Fees

As mentioned earlier, Ally Invest prides itself on the minimization of fees on its platform. Here are a variety of fees to look out for:

  • Commission - Free stocks, bonds, and ETFs.
  • Bonds - $1 trading fee.
  • Mutual Funds - $9.95 trading fee for no-load funds.
  • Ally Managed Portfolios - You will be charged a 0.30% annual management fee. This fee can be cut to 0% if you use Ally Cash Enhanced Managed Portfolio. 

Ally Invest Pros

  • Commission-free stocks, options, and ETFs.
  • Managed Portfolio only requires $100 to get started.
  • Waive the 0.30% annual management fee by using the Ally Cash Enhanced Managed Account. 
  • Easy to use platform, trading tools, and research information. 

Ally Invest Cons

  • Advanced investors/ traders might require more advanced features.
  • $9.95 trading fee for no-load mutual funds.
  • No access to human financial advisors.

Summary: Personal Capital vs Ally Invest

Personal Capital and Ally Invest are the two investment platforms where users can buy and sell securities and gain exposure to stock, bond, and other markets.

Though, Personal Capital and Ally Invest have a variety of important differences.

Best Platform For Trading Individual Stocks, Bonds, Options

If you are a beginner and interested in the concept of investing in individual stocks, ETFs, options, etc., then you may want to consider using Ally Invest self-managed accounts. You will be able to trade individual securities using the Ally invest self-managed service. 

Best Platform For Higher Net Worth Investors 

Personal Capital offers features that offer an appealing option for high net worth investors. Those that have more complicated financial situations and would like access to a financial planner may find that Personal Capital is the better option. 

Best Platform For Beginner Investors

Both Ally Invest and Personal Capital have features that cater to beginner investors. 

If you are a beginner and have a more complicated financial situation then Personal Capital may be the better option as you can access human financial advisors to answer your questions. However the $100,000 minimum makes this out of reach for most investors.

If you are a complete beginner with a simple and straightforward financial situation then Ally Invest Managed Portfolios may be a good option, with low fees and pre-built portfolios.

Click Here To Invest With Personal Capital!

personal capital vs ally invest
Article written by Edward Canty
Ed is a financial planner and personal finance enthusiast. At his day job, Ed helps clients plan for retirement, manage their investments, and navigate their tax situation. In his free time, Ed enjoys golfing, traveling, and wrenching on his old BMW.

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