M1 Finance vs Ellevest: Is Ellevest Really Better for Women?

Let’s review two of the popular robo-advisors these days in this M1 Finance vs Ellevest comparison. In the last decade, robo-advisors have evolved from complementary tools to main services capable of adjusting to many different client needs. The dawn of automated financial advisors began after the 2008 financial crisis. Back then, these early systems focused on transparency and reliability-based on data.

Over ten years later, robo-advisors now accept data, factor in human instincts, assess risk levels, monitor portfolios, and propose investment groups according to individual needs.

To get the most out of digital wealth management platforms, it’s important to consider their service fees, asset allocation, minimum account balance, total AUM (assets under management) value, security, and location availability, among other factors.

Let’s begin comparing M1 Finance vs Ellevest with an overview of both platforms.

What is M1 Finance?

Founded by Brian Barnes in 2015, M1 Finance is a digital wealth management platform that offers interaction with financial products. The platform also provides access to loans and spending using a Visa-enabled debit card.

The investment application enables users to interact with more than 80 portfolios created by professionals. It supports active and passive trading and allows users to accumulate wealth. The platform is purely digital and doesn’t have any human advisors.

M1 Finance has registration certificates from FINRA (Financial Industry Regulatory Authority) and the SEC (United States Securities and Exchange Commission). The platform’s headquarters are in Chicago, Illinois. Find out if M1 Finance is the best robo-advisor in our M1 Finance Review.

What is Ellevest?

Ellevest is a robo-advisor “designed by women, for women.” Interestingly, while it caters to financial needs that are unique to women, it’s open to serving clients of any gender. In 2020, the platform converted to subscription-based offerings.

Subscription fees range from $1 to $9 per month. There is a range of subscription packages including Ellevest Essential, Plus, and Executive. Ellevest Essential is the lowest tier and provides access to one portfolio that captures all your financial plans. Those on the Executive plan pay $9 per month and can interact with over six goals under one account.

For clients with accounts worth more than one million dollars, Ellevest provides the opportunity to join its Private Wealth Management offering. Learn more important info about Ellevest in this Ellevest Review.

Available Investments

M1 Finance

M1 Finance mainly deals in stocks and exchange-traded funds (ETFs). With these investments, the platform attracts clients who desire a long-term investment strategy. M1 allows you to interact with common or preferred stocks. The main difference between these two types of stocks is that common stocks give holders a stronger say in the running of a company while preferred stocks do not.

Additionally, common stocks have fluctuating dividend values depending on their share prices, while preferred stockholders receive predetermined dividend amounts. M1 investors also have access to commodities.

Ellevest

Ellevest allows users to invest in stocks, bonds, ETFs, and mutual funds. Other asset classes supported by the platform include commodities, developed markets, emerging markets, FDCI Cash, international real estate, mutual funds, SIPC insurance, US large-cap value, US small-cap, and US mid-cap, among others.

Notably, the virtual investment advisor offers you 21 asset classes to help you build your portfolio. Apart from assets, the platform also offers investment opportunities through automated investment accounts and retirement accounts.

Fees and Commissions Comparison

M1 Finance

M1 operates as a free service, exempting you from paying commissions on trades. However, not everything is free. The platform requires a minimum account balance of 100 USD for those operating taxable accounts. Retirement accounts have a minimum account balance of 500 USD.

To clarify where the platform gets its revenue, M1 Finance makes a profit by lending assets and earning interest on cash it holds in brokerage accounts. If you ever need physical paper copies of your records mailed to you, you’ll pay between $2 and $125 depending on whether you require domestic or international mail and the types of copies requested.

That’s not all. M1 also charges for account maintenance, account transfers, IRA termination, securities liquidation, wire transfers, and amendment repairs.

Ellevest

Ellevest charges a membership fee depending on the package you choose. Those on Ellevest Essential, Plus, and Executive plans pay $1, $5, and $9 in monthly subscription fees. However, Plus and Executive users can save $6 and $11 respectively when they pay annually instead of monthly.

Your subscription costs cover learning, banking, and investing fees as well as up to 50 percent of any career coaching sessions you attend. Also, Ellevest waives account and overdraft fees when you use the platform’s debit card.

Ellevest charges users on its Private Wealth Management plan a fee based on total assets under management. For example, those with an AUM of no more than two million USD pay 0.90 percent per year, while those with over 100 million USD worth of assets under management pay 0.25 percent per year.

Features

M1 Finance

Ellevest

Referral Programs

M1 runs two referral programs. One is the refer-a-friend program, while the other is an affiliate program. The refer-a-friend program awards $50 in incentives to both the inviter and the invitee. Affiliates, on the other hand, earn $100 from each referral, provided their referral’s account balance reaches $1,000. Apart from higher rewards, affiliates also get access to exclusive materials for promotional purposes. Sign up with our M1 Finance referral link and follow the steps in this M1 Finance referral article.

Ellevest doesn’t have a referral program as of August 2021. The platform claims the “program is being revamped.”

Customer Service

M1 Finance

M1 Finance mostly relies on email and a phone line to interact with customers. However, it has a comprehensive FAQ section that answers most user questions. The FAQ section also includes helpful videos for visual learners.

Ellevest

Ellevest provides customer service through FAQs and a phone number you can call. However, to get help via phone, you need to call between 9 a.m. and 6 p.m. Eastern Time. Fortunately, if you call within this timeframe, you’ll likely talk to an experienced customer service representative.

Unlike M1 Finance, Ellevest also connects with its customers through SMS and Facebook Messenger. Ellevest users using the platform’s private wealth management plan get additional assistance from human career coaches and financial planners, an offering unlike anything M1 Finance provides.

Education and Research

M1 educates its users using videos, blog posts, and email newsletters. Most of the content is designed to help self-directed investors use the platform more effectively while improving their long-term investment goals.

Ellevest takes a similar approach to educate investors through its FAQs corner, an expansive support section, articles, video content, and an online magazine. The company’s education materials align with its mission to draw women into the investing world. As such, it features plenty of content geared at females.

Pros and Cons

M1 Finance

Ellevest

Conclusion

M1 Finance gives professional investors enough room to adjust parameters as they see fit. For example, it allows for extensive portfolio customization enabling experienced investors to mimic the strategies of money managers.

On the other hand, Ellevest is built to hold the hands of less experienced investors. It’s best suited for women, although you don’t have to be a woman to use the platform.

Our M1 Finance vs Ellevest comparison has no clear winner since the two platforms cater to the needs of experienced and new users, respectively. Additionally, while M1 Finance takes a more general approach when it comes to its target market, Ellevest prioritizes women.