M1 Finance Review
The single most popular trend in investing today is passive investing. Most people associate passive investing with low-cost, exchange traded funds (ETFs) such as those you can purchase at Vanguard. But can you be a passive investor with a customized strategy? With M1 Finance you can. In the remainder of this page, we present a short review of the M1 Finance Platform. For a more in-depth review, visit our article M1 Finance Review or learn about 12 things that you can do with M1 Finance.
What is M1 Finance?
M1 Finance is a combination of a robo-advisor and a traditional brokerage. Like other robo-advisors, M1 presents several default themes known as “pies”, which have a default allocation between different securities. Unlike other robo-advisors, M1 Finance allows you to customize the allocation between different securities while keeping other great features such as the free re-balancing and trading.
What are M1 Finance Pies?
One way to invest in the stock market is by purchasing exchange traded funds (ETFs), which are a collection of tens, hundreds, or sometimes thousands of stocks or bonds in a single fund. ETFs are designed to perform well in most market conditions and can be held for an extended period of time. M1 Finance provides an opportunity to create your own ETFs with portfolio “pies”. Portfolio pies are easy to visualize as each investment is shown as a slice of pie. You can create your own pie or invest using expert pies made by financial professionals. Investing pies are a great way to explore your creativity in the stock market.
Put Your Investments on Autopilot
M1 Finance supports recurring transfers from your bank account to the M1 Finance account and automatic investing into your portfolio pies. With this feature, you can remove the emotion and nuisance of manual steps from investing. If you are looking for alternative auto investing apps, you may be interested in Cash App, a new peer-to-peer payment app that allows recurring investments in the stock market.
Take Out Low Interest Loans
Another unique feature of M1 Finance is the ability to take out a loan of up to 35% of your account balance without any credit check once your account balance reaches $10,000. With this feature, you can bypass traditional lending hurdles and get easier access to credit at a lower rate of 3.5% (2.00% if you are using M1 Plus).
M1 Finance Platforms
M1 Finance is a technology-first company with a smart investing platform. The M1 web application uses an integrated solution to automate investing. The interface is easy to use, even for those new to investing. It has a combination of the tools for traditional online brokerage and the exemplary components of Robo-investing platforms. The web application incorporates investing, banking, and margin lending all together in one platform. The “pie investing” feature, which is unique about M1 Finance, shows your portfolio balance and allocation of investment assets. The M1 web platform also has an education center, with informative tabs to help you with your financial decision making. You can find your M1 Finance referral link in the profile tab of the web application.
Almost all of the features of the M1 Finance web platform can be found on the M1 mobile app. It is an intuitive easy to use app that can help you invest, borrow, and spend on the go. One of the best features of the app is the dashboard that shows your existing portfolio and balance as a pie. You can customize your portfolio in the app just like the web platform. However, based on our experience, it is easier to create and manage pies on the web platform. Lastly, you can share your M1 Finance portfolio with friends, family, or social media from within the app. The M1 Finance invitation link can be found in the profile tab of the mobile app.
M1 Finance Compared to Other Robo Advisors
A Robo-advisor is an algorithmically driven process for building you a diversified investment portfolio based on your answers to a few investing questions. Robo-advisors are built with the expertise of professional advisors, then automated through an algorithm. The result is expert advice, a diversified portfolio, and no hassle of waiting days or weeks to build a diversified portfolio. So, which Robo-advisor should you use, and why? In this section, we will compare some of the main features of M1 Finance with five other popular Robo-advisors (Betterment, Ellevest, Wealthfront, Bloom, and SoFi).
Fees and Commissions Comparison
M1 Finance has the lowest fees and commissions compared to other automated investing platforms. The only fees you might see is if you invest in an ETF, that ETF will have a small expense ratio (not charged by M1 Finance).
|Platform||Fees and Commissions |
|$0 fees and $0 commissions or markups on trades. No annual fees. |
|$0 fees for “Checking” plan, 0.25% of your account balance annually for the “Digital” plan, and 0.40% for the “Premium” plan. |
|The “Essential” plan at $1/month, “Plus” plan at $5/month and the “Executive” plan at $9/month. |
|An annual fee of 0.25% of your account balance, charged monthly. There are no other miscellaneous fees. |
|Bloom Essentials: $45 per year per account, Bloom Standard: $120 per year per account, and Bloom Unlimited: $250 per year per year with unlimited accounts. |
|$0 for accounts that have a balance below $10,000 and for SoFi borrowers. Otherwise, it’s 0.25% of your account balance per year. |
Account Minimum Comparison
While M1 Finance does not charge a fee for using its platform, it has a minimum balance for both individual ($100) and retirement ($500) accounts. Once the minimum balance is met, you can invest with as little as $10. Other platforms may have $0 account minimum for basic plans and may require a minimum balance depending on the portfolio.
|Platform ||Minimum Balance |
|$100 minimum account size for taxable accounts and a $500 minimum for retirement accounts |
|$0 minimum for the “Checking” and “Digital” plan and $100,000 minimum balance for the “Premium” plan. |
|No requirement to maintain a minimum account balance. However, there are portfolio-specific minimums (ranging from $1 to approximately $240) |
|Minimum of $500 to invest |
M1 Finance Promotions Compared to Other Brokers
M1 has a generous referral program compared to its competitors. As noted above, the current M1 referral bonus amount is up to $30 for both referrers and referees. Additionally, you can earn up to $3,500 when you transfer your current investment portfolio from another broker to M1 Finance. The table below shows the current promotions for other Robo-advisors.
|Platform ||Promotions |
|Up to $3,500 transfer promotion and a $30 referral bonus for referring friends |
|12 months of free service from Betterment with an initial deposit of at least $15,000 |
|“Two Months Free” promotional offer is offered to those who sign up for an Ellevest Membership service (Ellevest Essential, Ellevest Plus or Ellevest Executive) |
|Invite program: additional $5,000 managed for free for referrals |
|Occasional promotion codes for discounted annual fees |
|Earn up to $10k for referring friends to SoFi |
M1 Finance: The Most Customizable Robo Advisor
Modern investment companies are making it easier every day for consumers to start investing in the stock market, but not all platforms can be a match for your preferences. With M1 Finance you can benefit from having a simple finance account with borrowing, investing, and checking account options in one place. Below we have listed some of the benefits of using other robo advisors.
WHICH ROBO-ADVISOR IS BEST FOR YOU
|Platform||Best for |
|Any investor who wants automated investing in combination with a high level of customization tailored to a specific requirement and those wishing to pay zero account fees. |
|Beginner investors who don’t have much to get |
started but still have the convenience of a financial advisor
|Investors who need help with an introduction to investing- get proper guidance with Ellevest’s educational materials. Also, women looking for a gender-based community whose goals are to provide a customized approach to investing |
|Those who already have a chunk of money available to invest, and those that want a truly digital financial advisor as needed |
|Anyone who has an employer-sponsored 401k, or an IRA account. Many 401k accounts have limited funds you can invest in and Blooom will make it easier to make the right investment decision |
|Those who wish to invest with any dollar amount and anyone who wishes to simplify their finances by having everything in one convenient location |
Is M1 Finance for everyone?
We like to think it’s best for advanced investors – those that have been in the market, know what they like and don’t like, and can choose their own investments. It’s a risk you take choosing your own allocations, but you may also use the prebuilt pies built by experts to start. The key is knowing what you’re saving for, what your timeline is, and how much risk you can take. Once you know that, M1 is a great way to invest, save money on fees (a lot of money), and enjoy someone else watching over your portfolio.