M1 Finance vs Webull: Which Is Better for Beginners?

Chef TastyDecember 22nd, 2023

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M1 Finance vs Webull, which is the best robo-advisor? Statistics estimate that by 2025, assets under management (AUM) held by robo-advisors will be upwards of sixteen trillion US dollars. These projections indicate an expanding industry spanning across the wealth management ecosystem. The growth in robo-advising represents years of iteration divided into robo-advisors 1.0, 2.0, 3.0 and 4.0.

The last two stages focus on algorithm-based adjustments, predefined rules, automatic asset shifts, and reliance on mobile applications over desktop apps. The search for the best robo-advisor has yielded fierce competition measured in the number of users and AUM.

While more users and higher values in AUM may indicate a reliable platform, it doesn’t mean the platform is necessarily good for you. To be on the safe side, you should clearly define what you’re looking for in an automated financial advisor before you start using one. Here is an M1 Finance vs Webull comparison to help you get started.

What is M1 Finance?

M1 Finance is an automated financial advisor that was launched in 2016. With its military-grade security features and adjustable portfolios, M1 is a top contender when searching for a robo-advisor. Apart from system security, the platform ensures users’ deposits through the Federal Deposits Insurance Corporation and is a member of the Securities Investor Protection Corporation (SIPC).

M1 Finance allows investors to invest, spend, and borrow against their portfolios. The platform is meant for those who already have a good understanding of the investment world. As such, beginners may find the platform to be too advanced. Read more information and our thoughts about M1 in our M1 Finance Review.

What Is Webull?

Webull is a robo-advisor that was founded in 2017 and is headquartered in New York.. The platform was founded by Wang Anquan, a former Alibaba Group employee. Webull is recognized by the United States Securities and Exchange Commission (SEC) and has more than 11 million registered users.

The robo-advisor’s users benefit from economic calendars, technical signals, and margin trading support, among other features. Additionally, they can invest in various instruments ranging from stocks, exchange-traded funds (ETFs), and cryptocurrencies. Check out more information about Webull in our Webull Review.

Available Investments

M1 Finance

Stocks – M1 Finance allows users to invest in stocks but only supports major stocks available on the US stock market.
Fractional shares – This is a unique feature being rolled out by robo-advisors. With fractional shares, M1 Finance investors can buy a portion of a share. For instance, if the SONY share price is listed at $700, M1 investors can invest as little as $20 and still enjoy the share’s price movements.
Exchange-traded funds (ETFs) – If you’re not into owning the base asset, M1 Finance allows you to benefit from an investment instrument’s price fluctuations without actually holding the assets through an ETF.

Unfortunately, the platform doesn’t support other investment instruments such as options and mutual funds.

Webull

Stocks – With Webull, you can interact with a host of company stocks. The platform enhances the investment experience by providing investors with analytics and tools to help in putting together a stock-based financial portfolio.
Options – This is a good choice if you need to take a double-edged stand in the market. For instance, you can buy calls or puts depending on whether the market is bullish or bearish. Webull sweetens the deal with leverage. You can access more funds to enter a position than your available account balance.
ETFs – Webull ETFs give users exposure to a group of stocks that are managed like a single stock.
American Depository Receipts (ADRs) – These are types of securities that allow you to invest in foreign companies. The robo-advisor provides this feature to help investors benefit from global opportunities.
Cryptocurrencies – Webull allows users to invest in virtual currencies. Investors can commit up to $1 in Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), or any of the listed popular cryptos.

Breakdown of Investments

Investments
Stocks
ETFs
Options
Cryptocurrency
ADRs
Fractions Shares

Fees and Commissions Comparison

M1 Finance users enjoy free account opening and trading. Apart from trading, other services like requesting physical copies of account statements, TOD account transfers, IRA termination, wire transfers, and amendment repairs incur charges. On the other hand, Webull champions for a commission-free trading experience and eliminates minimum deposits. However, the platform charges an annual margin rate of between 3.99 and 6.99 percent, depending on the debit balance.

Also, Webull charges short selling fees, postage fees, and stock transfer fees, and the platform also transfers regulatory fees to its users. Webull also charges fees for making deposits and withdrawals via wire transfer. Individual clearing firms dictate the costs depending on whether a US or non-US bank account is involved. For example, a wire transfer deposit to a US bank account costs $8 per deposit, while the same deposit to a non-US bank account costs $12.50.

Features

M1 Finance

From investing, borrowing, and spending, M1 Finance is packed with investor-directed features. Other features that set the platform apart include, but are not limited to:

Portfolio construction and management – M1 Finance employs pies during portfolio construction. Each pie represents a slice of an individual investment. The pieces are then combined to form a circle that provides a visual representation of all your assets.
Dynamic portfolio rebalancing – This is meant to reduce the amount of drift when pies are added or removed from your portfolio. You can also manually initiate a rebalance at any time.
Cash management – Cash management is a feature of M1 Finance’s Spend functionality. Cash management distributes excess funds into a savings account that’s connected to a debit card.

Webull

Virtual trading – Webull allows users to virtually trade options and stocks. This feature enables new traders to hone their trading skills using virtual funds before committing real funds. Virtual trading is also called paper or demo trading.
IRAs – These fall in the section of accounts and are ideal for those investing toward their retirement. Webull supports Rollover or Roth IRAs.
Brokerage account – Brokerage accounts allow users to invest in assets and securities.
Mobile and desktop application – Webull caters to busy users on the move with a convenient mobile app.

Referral Programs

M1 Finance rewards users for spreading the word and encouraging others to join the platform. Those who successfully recruit family and friends using the platform’s refer-a-friend program earn $50. Even referrals take home this same amount. For people who want to promote the platform more seriously, also known as affiliates, M1 Finance rewards $100 when referrals deposit their first $1,000 after signing up through an affiliate link. You may use this M1 finance referral link if you want to sign up and get a $50 referral bonus. Also, if you need the step-by-step instructions on how to sign up with M1 Finance check out our M1 Finance referral article.

Webull also understands the power of referrals, but the company takes a different route compared to M1 Finance. For instance, instead of providing cash deposits, it rewards referrals using free stock.

The invitee needs to deposit a minimum of $100 for the referrer to receive a reward, and the incentive is claimable five days after the deposit. Also, Webull runs occasional referral program promotions to incentivize existing users to spread the word. Sign up with this Webull referral link to get free stocks and read this Webull referral article to know the guidelines of the Webull referral program.

Customer Service

M1 Finance doesn’t offer round the clock customer support. Its mobile phone number is active from Monday through Friday, 9 a.m. to 4 p.m. Eastern Time. Also, M1 users can use a provided email address, fill out an online form, or engage with a chatbot to get help.

On the other hand, customer service representatives at Webull serve customers 24/7 and are available via phone. Additionally, users can get help using the platform’s official email address.

Education and Research

Although M1 Finance is designed for investors with a good grasp of the investment ecosystem, it provides a “frequently asked questions” section to help investors get information before contacting customer support. Also, for comprehensive answers on “how-to” topics, the platform hosts a blog.

Webull uses a help center and blog to educate users. Unfortunately, being beginner-friendly, it’s the blog is not as helpful for beginners as it should be. However, the platform’s help center seems to address a wide variety of topics.

Pros and Cons

M1 Finance

Pros	Cons
Feeless trading Supports retirement accounts Supports fractional shares, stocks, ADRs, and ETFs Best for experienced traders Has more options for customer support Has educational materials Registered with the SEC, SIPC, and FINRA Supports borrowing against your portfolio	Limited available investments Not beginner-friendly Doesn’t support cryptocurrency Charges for dormant accounts Doesn’t allow short selling stocks

Webull

Pros	Cons
Commission-free trading No dormant account fees Supports margin trading Supports cryptocurrency, stocks, IRAs, ADRs No minimum account balances SEC, SIPC, FINRA recognized Supports short selling stocks	Doesn’t support fractional shares Limited education materials

Conclusion

If you’re a professional investor interested in switching over from traditional advising to robo-advising, M1 Finance can save you some fees since its built for experienced investors. The platform enhances the investing experience by allowing investors to spend some overflows from their investment accounts. However, you’ll have to deal with the small array of available investment instruments.

On the other hand, Webull welcomes novice investors and traders who are excited about emerging assets like cryptocurrency. Unfortunately, the platform’s education and research sections aren’t comprehensive, so new users may need to spend some time educating themselves about investing on the platform.

Overall, M1 Finance wins for experienced investors, while Webull is a good choice for intermediate users.

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