You’ll find the M1 website to be clean and straightforward with easy sign-up instructions, clear performance metrics, and simple navigation. This includes tabs that cover your portfolio activity and holdings; buttons to buy, sell, or rebalance; and graphs that break down your allocation in detail. When it comes to improvements that make for a better user experience compared to traditional financial sites, M1 Finance certainly delivers.
Similar to the desktop version, the M1 Finance app scores highly for its ease of use. The workflow of the website and the app are nearly identical experiences. You’ll find you’re able to do just about anything on the app that you can do on the website, so it’s just a matter of which experience you prefer.
There are several education resources you can leverage through M1 Finance. You’ll find the blog contains a broad range of articles centered around general investing strategies and overall best financial practices. One notable focus of this content is empowering investors with information to improve their long-term portfolio mentality. M1’s social media accounts, videos, and “The Investors Mindset” newsletter offer additional ways to access this material.
Since M1 steers away from providing financial advice and recommendations, this information is shared from a high-level perspective with the goal of improving your knowledge base. Beyond that, much of the educational content is about learning to use the platform to the fullest.
M1 Finance doesn’t charge any portfolio management or trading fees. This is a unique aspect of the platform that puts more dollars to work on your behalf. Rather, M1 makes money through interest, lending securities, the Plus membership, and payment for order flow. ETFs purchased through the platform have their own fee that is paid directly to the fund manager, not M1, as is standard industry practice. M1 Plus members pay a $36 annual subscription fee (or $3 monthly). There is also a miscellaneous fee schedule for additional account operations. Overall, the low cost of the platform is an attractive feature for investors.
There are, however, IRA termination and outgoing transfer fees of $100, in addition to a $50 fee on accounts of up to $50 where no trading activity has occurred for 90 days.
| Category | Fee |
|---|---|
| Management fees for $5,000 account | $0 |
| Management fees for $25,000 account | $0 |
| Management fees for $100,000 account | $0 |
| Termination fees | $100 for outgoing transfers & IRA closures |
| Expense ratios | Typically 0.06%-0.20% |
| Mutual funds | N/A |
The Bottom Line
M1 Finance provides a great option for experienced investors who value extensive customization options. Customization is a clear strength of the M1 platform that sets it apart from the competition. Choosing among 80 options or building your own portfolios from scratch is a fundamentally different experience if you are expecting an automated investing platform to simply match you up with an ideal allocation. M1 has also made a significant cut to M1 Plus membership costs, making the perks of membership more attractive to investors, particularly those looking to run more of their finances through the platform. Although the banking side of M1 Finance isn't the focus of this review, it is worth noting that the M1 checking account has been discontinued. This may change in the future as M1's CEO still owns a bank.
Although M1 is a self-directed investing platform rather than a robo-advisor, it comes with the ability to automate portfolio management. This allows individual investors who feel comfortable with screeners and strategies to eliminate some of the more monotonous tasks like rebalancing. Best of all, it is really free. There are some miscellaneous fees and unavoidable expense ratios for ETFs if you want to be picky, but otherwise, M1 Finance gives a self-directed investor a lot of automation power without any significant costs.
Is M1 Finance Trustworthy?
Yes, M1 Finance is trustworthy as it is registered with the Financial Industry Regulatory Authority (FINRA). It is also insured against loss of stocks and cash held by customers through the Securities Investor Protection Corporation (SIPC). The company also has high-level security with two-factor authentication and military-grade 4096-bit encryption.
What Are the Cons of Using M1 Finance?
M1 Finance focuses on self-directed portfolio selection and then automates the management of your portfolio. Essentially, you choose the mix of assets and then M1 will keep those levels using future contributions to top up underweight assets or withdrawals to sell overweight ones. Beyond this, the platform does not offer human advisors and financial planning. In addition, there is limited access to financial tools, calculators, and goal planning. While M1 doesn't charge fees for account management or trading, tax-loss harvesting and recommended portfolio functions are not available. Users are also unable to link other accounts to see how they're diversified throughout all portfolios.
Is M1 Finance Good for Beginners?
M1 Finance was designed for seasoned investors who are comfortable choosing their own portfolios. Beginners may run into difficulty using the platform due to a lack of access to human consultants, goal planning, and financial calculators. That said, a new investor can easily create a well-balanced portfolio using the curated Expert Pies, but you have to be aware of your risk tolerance and timelines when making selections.
Is M1 Finance Premium Worth it?
M1 Finance's premium option, called M1 Plus, does have significant benefits. It offers two exclusive trade windows at 9:30 a.m. ET and 3 p.m. ET. Members are also able to use "smart transfers," which let them move money automatically between their taxable investment accounts and their M1 savings account. In addition, members can open custodial accounts.
M1 Plus also offers margin loans at a rate of 7.25%, personal loans starting at 7.99%, and an M1 savings account with 5.00% APY and 1.5% cash back on all purchases and up to 10% cash back for specific brand purchases with the Owner's Rewards card.
How Does M1 Finance Help Save You Money on Taxes?
Investors looking for a platform to reduce their tax burden will find that M1 Finance offers little help, as it doesn't offer tax-loss harvesting. However, it does seek to minimize taxes by selling securities in order of lowest tax burden to highest. This is a pretty basic approach that is only triggered by a sale to move cash out and/or rebalancing. There isn't any ongoing management of your portfolio to swap securities of similar types to offset taxable gains.
How We Review Robo-Advisors
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8 to Feb. 9, 2024.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:
- Account Services: 10.00%
- Account Setup: 5.00%
- Customer Service: 5.00%
- Fees: 15.00%
- Goal Planning: 21.00%
- Portfolio Contents: 17.00%
- Portfolio Management: 17.00%
- Security & Education: 5.00%
- User Experience: 5.00%
Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors.
Read more about how we research and review robo-advisors.
Separately, our research team conducted a survey of 205 U.S. adults aged 18 to 72 who are current clients of one of 18robo-advisors. While the information collected did not influence the development of our ratings model, it was instrumental in gathering the valuable insights published inInvestopedia's 2023Robo-Advisor Consumer Survey.
Participants in our 2023Robo-Advisor Survey opted in to an online, self-administered questionnaire from a market research vendor. Data collection took place between Aug. 30 and Sept. 15, 2023, with 11 video interviews conducted with volunteer respondents from Sept. 7 to Sept. 17, 2023. Multiple quality checks, including screeners, attention gauges, comprehension evaluations, and logic metrics, among others, were used to ensure only the highest quality responses were included.
