Online Brokerage Comparison: Vanguard vs. Ally Invest

Trading platform

We have a confession to make: We’re long-term investors, not traders. Therefore, we tend to spend more of our time holding stocks rather than trading them, and we don’t have a particularly strong opinion about trading platforms.

As with operating systems or soft drinks, we tend to think that the debates about which broker has the best platform mostly comes down to personal preference and opinion. If the bells and whistles of a trading platform are important to you, we’d suggest trying out a broker’s demo account to see how it fits you. Because, ultimately, different trading or investing styles require different features.

Plus, both Vanguard and Ally Invest have simple, user-friendly trading platforms that are well suited to most long-term investors. Frequent traders and sophisticated investors might prefer to choose a broker that offers a complex trading platform.

International stocks and ADRs

You can invest in foreign companies by buying American depositary receipts (ADRs) on U.S. markets as a client of either broker.

However, if you want to go direct to the source to trade on an international market, there are some limitations. Only Vanguard will allow you to transact on an international exchange, but it charges a $50 fee in addition to a commission to make each trade. Notably, investors can shop from thousands of ETFs and mutual funds that hold foreign stocks, so these limitations really only apply to buying or selling shares of individual companies.

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One of the best parts of having a brokerage account is getting supplemental research to help you make good investment decisions. Vanguard customers have access to reports and research from Standard and Poor’s, Thomson Reuters, and First Call, just to name a few third-party research providers. Ally Invest offers profit and loss calculators, streaming charts, plus market and company snapshots for individual stocks. Depending on your personal needs, you could find either brokerage provides ample research to fit your investment style.

Better online stock broker: Vanguard or Ally Invest?

Truly, you could make the case for either brokerage being the “better” broker, because it’s all dependent on your personal portfolio. Ally Invest has lower published commissions for options, but it doesn’t offer any no-transaction-fee mutual funds or access to international markets. Vanguard has higher commissions on options and on any mutual funds that don’t trade on an NTF basis, but gives the opportunity to invest in foreign stocks, and offers a vast list of no-transaction-fee mutual funds. Ultimately, it’s about how a broker’s services fit within the puzzle of your personal portfolio.

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